Information concerning significant proceedings in front of court, body appropriate for arbitration proceedings or in front of administration bodies in which the companies of the ORLEN Group act as the defendant:

Claim of Warter Fuels S.A. (formerly: OBR S.A.) against ORLEN for compensation

On 5 September 2014, OBR S.A. (currently: Warter Fuels S.A.) filled an action against ORLEN with the District Court in Łódź for a claim for payment in respect of an alleged breach by ORLEN of patent rights. The amount of the claim in the lawsuit was estimated by Warter Fuels S.A. in the amount of PLN 84 million. The claim covers the adjudged sum of money from ORLEN for Warter Fuels S.A. in the amount corresponding to the value of the license fee for the use of the solution under the above patent and adjudge the obligation to repay the benefits derived from the use of this solution. On 16 October 2014 ORLEN responded to the lawsuit. By the procedural document from 11 December 2014 the value of the dispute was referred to by the plaintiff in the amount of PLN 247 million. So far, several hearings have been held, during which witnesses submitted by the parties were heard by the court. The court appointed an expert to prepare an opinion in the case of the University of Technology and Economics in Budapest. Experts from the Budapest University of Technology and Economics are in the process of preparing an opinion.

POLWAX S.A. - ORLEN Projekt S.A. dispute

1. Case filed by ORLEN Projekt against POLWAX for the payment of PLN 6.7 million, pending before the District Court in Rzeszów, case file no. VI GC 225/19

On 23 May 2019 the Court issued a warrant for payment to ORLEN Projekt in a writ of payment proceedings covering the entire amount claimed. On 27 November 2020, the District Court issued a judgment in the case, according to which (i) upheld the payment order in full with respect to the claimed principal amount of PLN 6.7 million as well as with respect to the overdue interest for delay in commercial transactions from 2 October 2019 to the date of payment; (ii) revoked the payment order issued dated on 23 May 2019 for the payment of a part of the overdue interest, i.e. in the amount of PLN 3 million from 11 January 2019 to 1 October 2019 and in the amount of PLN 3.7 million from 25 January 2019 to 1 October 2019.
Both parties appealed against the judgement, POLWAX appealed against it in its entirety, whereas ORLEN Projekt appealed against the part in which the Court revoked the payment order concerning payment of statutory overdue interest for delay in commercial transactions. Currently the case is considered by the Court of Appeals in Rzeszów under the file number I AGa 20/21. On 10 November 2022, the Court of Appeal announced its verdict, according to which it upheld the payment order issued by the District Court in its entirety and awarded POLWAX to ORLEN Projekt with the costs of the lawsuit. The judgment of the court of second instance is final. POLWAX filed a cassation appeal against the judgment of the Court of Second Instance to the Supreme Court. ORLEN Projekt  filed a response to POLWAX 's cassation appeal to the Supreme Court.

2. Case filed by ORLEN Projekt against POLWAX for the payment of PLN 67.8 million, pending before the District Court in Rzeszów, case file no. VI GC 201/19
In the case, ORLEN Projekt claims from POLWAX the payment of a total amount of PLN 67.8 million together with overdue interest for delay consists of: (i) remuneration for completed construction works and deliveries, (ii) unjustifiably executed performance guarantee, and (iii) costs related to ORLEN Projekt's withdrawal from the contract. The court has already heard all the witnesses and parties in the case. The proceedings have been suspended until the case heard by the Court of Appeal in Rzeszów under file no. act I AGa 20/21. In connection with the issuance by the Court of Appeal in Rzeszów on 10 November 2022 of the judgment in the case under reference number I AGa 20/21, on 22 November 2022, the ORLEN Projekt filed a motion for the District Court to resume the suspended proceedings. The application has not yet been recognized.

3. Case filed by POLWAX against ORLEN Projekt for the payment of PLN 132 million, pending before the District Court in Rzeszów, case file no. VI GC 84/20
The claim submitted by POLWAX against ORLEN Projekt includes PLN 84 million for material damage and PLN 48 million for lost profits that were supposed to arise in connection with improper performance and non-performance of the contract by ORLEN Projekt. The proceedings have been suspended at the joint request of the parties. On 21 October 2021 the court, on the application of POLWAX, made an order to resume the suspended proceedings. On 20 April 2022, the proceedings were suspended until the case: (i) considered by the Court of Appeal in Rzeszów under file no. act I AGa 20/21; (ii) heard by the Regional Court in Rzeszów, file no. VI GC 201/19. On 22 November 2022, the Court of Appeal in Rzeszów allowed ORLEN Projet complaint against the decision of the District Court to suspend the proceedings and issued a decision by which it overturned the challenged decision of the District Court. As a consequence, ORLEN Projekt filed a motion with the District Court to initiate the proceedings, which has not yet been examined.

4. Case filed by POLWAX against ORLEN Projekt for the payment of PLN 9.9 million, pending before the District Court in Rzeszów, case file no. VI GC 104/20 POLWAX claims from ORLEN Projekt the payment of PLN 9.9 million together with overdue interest for delay consists of: (i) reimbursement of costs of removal and disposal of waste in the form of contaminated land from the Project area, and (ii) non-contractual storage of land from the Project area on plot no. 3762/70 belonging to POLWAX. So far, nine hearings have been held in the case. The next meeting was held on 6 February 2023, at which ORLEN submitted a copy of POLWAX S.A.'s notification of the possibility of committing a crime, requesting the suspension of civil proceedings until the criminal case is resolved. The court adjourned the hearing indefinitely. At a closed session, the Court will decide on the request of the parties to take evidence from the opinion of a forensic expert, as well as another request of POLWAX to suspend the proceedings.

5. Case filed by POLWAX against ORLEN Projekt for the removal of movable property, pending before the District Court in Tychy, case file no. VI GC 120/20
POLWAX demanded that the Court obliges ORLEN Projekt to restore the legal status by emptying warehouses submitted to ORLEN Projekt in order to store equipment and materials for the purposes of the conducted investment. So far, six hearings have been held in the case. At the hearing on 23 June 2022, the Court heard the defendant, admitted evidence from an expert witness and adjourned the hearing without a time limit. A court expert prepared an opinion which was delivered to both parties. On 13 February 2023 ORLEN Projekt raised objections to the expert's opinion. POLWAX did not raise any objections to the expert's opinion, indicating that the opinion only confirms the claimant's position in this proceeding. On 28 March 2023, the Court commissioned a court expert to prepare a supplementary opinion.
In the opinion of ORLEN Projekt, the claim is without merit, therefore the company did not recognise the provision.

Technip Italy S.p.A. v ORLEN Unipetrol RPA, s.r.o.

In connection with the delay in execution of the Agreement concluded between Technip Italy S.p.A. ("Technip") and ORLEN Unipetrol for the construction of the Polyethylene Plant in Litvinov, Technip was obliged to pay contractual penalties for the delay in the amount of PLN 108 million, translated using the exchange rate as at 31 December 2022 (representing EUR 23 million). Technip did not pay the above mentioned contractual penalties to ORLEN Unipetrol, therefore ORLEN Unipetrol activated the bank guarantee in the amount of PLN 98 million, translated using the exchange rate as at 31 December 2022 (representing EUR 21 million).
On 17 August 2020, Technip called for arbitration. In November 2020, ORLEN Unipetrol claimed an offset of the remaining contractual interest from the invoice issued by Technip for the remaining part of the contractual remuneration: the outstanding amount of contractual interest for delay is PLN 8.8 million translated using the exchange rate as at 31 December 2022 (corresponding to EUR 1.8 million).
On 30 November 2020, ORLEN Unipetrol submitted a reply to the statement of claim and filed a counterclaim for the outstanding contractual interest for delay in the amount of PLN 8 million translated using the exchange rate as at 31 December 2022 (corresponding to EUR 1.8 million).
On 5 January 2021, Technip submitted an amendment to the demand for arbitration increasing the total amount of the claim to PLN 140 million translated using the exchange rate of 31 December 2022 (corresponding to EUR 28.8 million).
The arbitration proceedings are pending before the Court of Arbitration at the International Chamber of Commerce in Vienna. On 16 November 2022, the Court of Arbitration issued the judgment against Unipetrol RPA s.r.o. in favour of Technip in the amount of PLN 0.04 million, translated using the exchange rate as at 31 December 2022 (corresponding to EUR 0.01 million), including interest, and dismissed Technip's other claims against Unipetrol. In addition, Technip was ordered to pay other interest for contractual penalties, arbitration costs and legal assistance costs. The case is legally closed.

Contingent liabilities related to the ENERGA Group

As at 31 December 2022, the contingent liabilities of the ENERGA Group recognised in these interim condensed consolidated financial statement of the ORLEN Group amounted to PLN 260 million.
The largest item of contingent liabilities of the ENERGA Group consists of legal claims relating to the power infrastructure of Energa-Operator S.A. located on private land. The Group recognises provisions for filed legal claims. If there is uncertainty as to the validity of the amount of the claim or legal title to land, the Group recognises contingent liabilities. As at 31 December 2022, the estimated value of those claims recognised as contingent liabilities amounts to PLN 240 million, while as at 31 December 2021 its value amounted to PLN 249 million. Considering the legal opinions, the estimated amounts represent a risk of liability of less than 50%.

Arbitration procedure brought by Elektrobudowa S.A. against ORLEN

Elektrobudowa S.A. filed an action against ORLEN with the Arbitration Tribunal of the Polish Consulting Engineers and Experts Association (SIDIR) of Warsaw (case No. P/SA/5/2019), seeking payment of a total of PLN 104 million and EUR 11.5 million. The case concerns performance of the EPC contract between ORLEN and Elektrobudowa S.A. for the construction of a metathesis unit. The amount in dispute includes:

1. PLN 20.6 million and EUR 7.6 million plus statutory default interest, alleged to be payable under the EPC Contract to Elektrobudowa S.A. or, alternatively, to Citibank if the consideration is found to be payable to Citibank following assignment;
2. PLN 7.8 million and EUR 1.26 million plus statutory default interest accrued since 23 October 2018 for additional and substitute works, alleged to be payable to Elektrobudowa S.A. or Citibank (see above);
3. PLN 62.4 million plus statutory default interest since 27 December 2019 as remuneration by reference to which the lump-sum should be increased in favour of Elektrobudowa, or Citibank as above;
4. PLN 13.2 million and EUR 2.6 million plus statutory default interest accrued since 25 October 2019, alleged to be payable to Elektrobudowa S.A. for the harm it suffered as a result of wrongful drawdown of funds by PKN ORLEN under bank guarantees.

On 13 September 2021 the Bankruptcy Trustee extended the claim by PLN 13.2 million and EUR 2.6 million constituting a claim for return of the amounts retained as a Guarantee Deposit with statutory overdue interest from 24 March 2021 to the date of payment.

According to information published in Consolidated Financial Statements for the year 2021, as a result of the Arbitration Tribunal’s rulings, against which ORLEN was not entitled to appeal, the Company has paid the Bankruptcy Trustee a total of PLN 10.01 million and EUR 5.52 million so far, plus statutory interest for delay in payment. These amounts related mainly to partial payments of the contractual remuneration, as well as remuneration for additional works.

Within 12 months of 2022, the Arbitration Tribunal issued the following rulings:

(I) The interim judgement (No.4)  of 7 February 2022 regarding Elektrobudowa’s claims for compensation of PLN 0.4 million as additional remuneration for constructing K-1 Chamber in a method different from that specified in the original construction design, whereupon the Adjudicating Team decided that this claim was justified in principle. The interim judgement does not state that ORLEN is obliged to pay the above-mentioned amounts to the claimant, but it is an expression of the Adjudicating Team that Elektrobudowa is entitled to expect payment from ORLEN for the above-mentioned material scope as additional.

(II) The interim judgement (No.5)  of 15 February 2022 regarding Elektrobudowa’s claims for compensation of PLN 5.3 million amount as additional remuneration for the construction of the Cold Weather Station building in a method different from the Agreement whereupon the Adjudicating Team decided that this claim was justified in principle. The interim judgement does not state that ORLEN is obliged to pay the above-mentioned amounts to the claimant, but it is an expression of the Adjudicating Team that Elektrobudowa is entitled to expect payment from ORLEN for the above-mentioned material scope as additional.

(III) Partial Judgment (No. 10) of 15 April 2022 ordering the defendant to pay the plaintiff the amount of PLN 0.5 million and EUR 0.8 million with interest for late payment until the date of payment as additional remuneration and partial remuneration for deliveries of equipment. The awarded amounts were covered by previously issued preliminary judgments (2) and (3).

(IV) Partial Judgment (No. 11) of 26 May 2022, stating that ORLEN unsuccessfully deducted PLN 5.8 million and EUR 0.4 million from the remuneration claimed by Elektrobudowa in the part retained by ORLEN under 15.2 of the Agreement. The judgment is not an award judgment.

(V) Partial judgment (no. 12) of 30 June 2022, ordering to pay the plaintiff a total amount of PLN 11.9 million and EUR 2.4 million with interest for delay on account of partial remuneration for the detainee as a guarantee deposit.

(VI) Partial judgment (no. 13) of 5 December 2022, ordering to pay the plaintiff a total amount of PLN 0.15 with interest for delay as remuneration for the execution of the Instructions for preparing the installation for operation after renovation and dismissing the claim for the amount of PLN 0.10 as the remaining part of this claims.

(VII) Partial judgment (no. 14) of 30 December 2022, ordering to pay the plaintiff the amount of PLN 0.3 million net as additional remuneration for the execution of a different K-1 chamber than provided for in the construction design, together with statutory interest for delay and the amount of PLN 5.3 million net as additional remuneration for the construction of another building of the Zimna Station than provided for in the construction design, together with statutory interest. The amounts awarded are the amounts referred to earlier in the preliminary judgments (4) and (5).

The main receivables awarded in partial judgments (No. 10) and (No. 12) were paid by ORLEN in full to the receiver.

The total value of provisions recognised as at 31 December 2022 in connection with the pending proceedings with Elektrobudowa amounted to PLN 76 million.

Contingent liabilities acquired as a result of merger transactions with LOTOS Group and PGNiG Group

The following is a description of the material contingent liabilities relating to the former LOTOS Group companies and the former PGNiG Group companies acquired by the Group in merger transactions, a description of which is provided in note 7.3. In accordance with the requirements of IFRS 3, as part of the accounting for merger transactions, the Group should recognise contingent liabilities assumed in a business combination at the acquisition date, even if it is not probable that an outflow of resources embodying economic benefits will be required to settle the liability. At the date of these condensed consolidated financial statements, the accounting for the merger with the LOTOS Group and the merger with PGNIG has not been completed. Thus, in subsequent reporting periods, the contingent liabilities described below will be measured at fair value, as well as potential additional contingent liabilities resulting from regulatory, legal, environmental and other risks, and they will be included in the purchase price allocation process at the fair value of the acquired net assets.

AGR Subsea Ltd. and LOTOS Petrobaltic S.A. dispute

In March 2013, LOTOS Petrobaltic S.A. received a call for payment from AGR Subsea Ltd. (“AGR”) for approximately GBP 6.5 million as the contract sum payable to AGR for dredging the Baltic Beta rig’s legs. In response, LOTOS Petrobaltic S.A. challenged the amount claimed by AGR and proposed the payment to AGR in the amount of PLN 16 million (corresponding to GBP 3.2 million translated using the average exchange rate of the National Bank of Poland as at 31 December 2012). The dispute between the parties concerns the nature of the contract, reasons for its execution after the due date and incomplete, as well as validity of its termination by LOTOS Petrobaltic S.A., and the demand for reimbursement of costs incurred to employ the alternative contractor engaged by LOTOS Petrobaltic S.A. to complete the work (counterclaim against AGR for payment in the amount of GBP 5.6 million) AGR Subsea Ltd. took its claim to court. On 11 December 2020, the Court issued a judgement awarding the full claimed amount to AGR, i.e. GBP 6.5 million together with overdue interest, reimbursement of court expenses and legal representation costs, and dismissed LOTOS Petrobaltic S.A.’s claim.
In view of the fact that the notice, stating the date of the Court’s closing hearing and announcement of the judgement, was not effectively delivered to LOTOS Petrobaltic S.A.’s attorney, the attorney, without his fault, did not participate in the closing hearing held on 27 November 2020. The attorney did not know the date of publication of the judgement issued on 11 December 2020, did not attend the date of publication, nor learn its contents.
In a view of the information obtained by LOTOS Petrobaltic S.A, during the Court hearing held in March 2021, the objections were presented to the Court regarding AGR’s judicial and procedural capacity, its legal standing and proper authorisation of its attorneys. These doubts arose, following the knowledge in March 2021, about the announcement on 25 May 2015 of a Winding-up procedure with respect to AGR and appointment of a Liquidator to administer the affairs and represent AGR.
On 2 April 2021, LOTOS Petrobaltic S.A. lodged a complaint for the resumption of proceedings in the case. On 18 May 2021, LOTOS Petrobaltic S.A. applied to the Regional Prosecutor's Office in Gdańsk with a request to bring an action for the resumption of proceedings in the cases No IX GC 811/13 and No IX GC 12/15. The complaint of the Regional Prosecutor's Office in Gdańsk for the resumption of proceedings in the combined cases was filed with the Court on 12 August 2021.
On 9 December 2021, AGR applied for enforcement of the judgement. By a decision of 13 December 2021 issued in case IX GC 696/21 (request for resumption of proceedings – complaint of the Regional Prosecutor's Office), the Regional Court in Gdańsk suspended the enforceability of the judgement of 11 December 2020 covered by the enforcement motion. AGR's enforcement motion was dismissed by the Court ordered on 15 December 2021.
Proceedings are currently underway in the context of:

• LOTOS Petrobaltic S.A. complaint for the resumption of proceedings (IX GC 1031/21), and
• the Regional Prosecutor's Office in Gdańsk complaint for the resumption of proceedings(IX GC 696/21).

As at 31 December 2022 the total value of provisions recognised in connection with the pending proceedings amounted to PLN 50 million. 

Ex. Grupa LOTOS S.A. tax settlements

Following the merger ORLEN with Grupa LOTOS S.A. on 1 August 2022, ORLEN as a legal successor of Grupa LOTOS S.A. became a party to the following tax proceedings.
Ex. Grupa LOTOS S.A. tax settlements are subject to customs and tax inspections carried out by the tax inspection authorities. On 21 January 2022 ex. Grupa LOTOS S.A. was notified of the results of two customs and tax inspections for the period of January−October 2014 and October−December 2015, issued on 7 January 2022. As a result of these inspections, input VAT settlements by the Company, for a total amount of PLN 23.3million (net of interest), were questioned. On 12 April 2022 ex. Grupa LOTOS S.A. was notified of the result of custom and tax inspection for the period of January−December 2016, issued on 7 April 2022. As a result of this inspection, input VAT settlements by the Company, for a total amount of PLN 6.5 million (net of interest), were questioned. The company has not filed corrections to the VAT returns for the aforementioned periods as agreed by the authority, because it was of the opinion that there are arguments in favour of taking a different course of action. Due to the failure to submit the corrections by the Company, the tax authority (Head of the Pomeranian Customs and Fiscal Office in Gdynia) has conducted tax proceedings). On 29 March 2023 the tax authority issued  two decisions, where determined the VAT liability for the period of April-October 2014 and October 2015 and indicated an underestimation of the liability in the amount of PLN 23.3 million. The Company plans to appeal to the second instance authority against the decision. The Company will also have the possibility to file complaints  to the Provincial Administrative Court in Gdańsk, and if the court reaches an unfavourable verdict, it will be possible to file a cassation complaint with the Supreme Administrative Court.
In connection with a judgement by the Court of Justice of the European Union of October dated 16 October 2019 in Case C-189/18 Glencore, on 15 January 2020 the company requested for resumption of proceedings in which the following decisions had been issued:

• decision by the Director of the Tax Chamber in Gdańsk, dated 29 December 2015, upholding the decision by the Director of the Tax Audit Office in Bydgoszcz, dated 28 September 2015, assessing the company’s VAT liabilities for individual months of 2010 at a total amount of PLN 48.4 million,
• decision by the Director of the Tax Chamber in Gdańsk, dated 29 February 2016, upholding the decision by the Director of the Tax Audit Office in Bydgoszcz, dated 28 September 2015, assessing the company’s VAT liabilities for individual months of 2011 at a total amount of PLN 112.5 million,
• decision by the Director of the Tax Administration Chamber in Gdańsk, dated 25 October 2018, upholding the decision by the Head of the Gdańsk Province Customs and Tax Office in Gdynia, dated 19 January 2018, assessing the company’s VAT liabilities for January 2012 at a total amount of PLN 7.3 million,

after resumption of the proceedings, for:

• reversal of the decisions by the tax authorities of both instances and discontinuation of the tax proceedings – with respect to the proceedings for 2010–2011;
• suspension of the proceedings until final conclusion of the court proceedings – with respect to the proceedings for 2012, in connection with proceedings pending before the Supreme Administrative Court, initiated by the company’s cassation complaint.

On 8 October 2020, the Head of the Tax Administration Chamber in Gdańsk upheld the decisions of the Head of the Tax Chamber in Gdańsk, dated 29 December 2015 and 29 February 2016. On 23 November 2020, the company appealed against the unfavourable decisions of the Head of the Tax Administration Chamber in Gdańsk. On 23 December 2020, the Head of the Tax Administration Chamber in Gdańsk issued decisions refusing to revoke its decision of 8 October 2020, against which the company filed complaints with the Provincial Administrative Court in Gdańsk. On 15 June 2021, the Provincial Administrative Court of Gdańsk dismissed the company’s complaints against refusal to reverse the final decisions concerning determination of VAT liabilities for the individual months of 2010 and 2011. On 10 September 2021, the company appealed in cassation against the judgements of the Provincial Administrative Court of Gdańsk to the Supreme Administrative Courts.
As at 31 December 2022, Group disclosed a provision for tax risk, recognised in connection with such proceedings, in the amount of PLN 98.4 million.

LOTOS Exploration and Production Norge AS tax settlements

Due to the crisis caused by the COVID-19 pandemic and the sharp decline in commodity prices, the Norwegian government introduced a provisional tax regime for 2020-2021 that allowed companies investing on the Norwegian continental shelf to directly expense capital expenditure and to receive an immediate refund of the tax loss incurred in each of the years. With these solutions, the effective tax rate was lower than the standard of 78%. 
At the same time, the government has introduced an additional rule, namely for investment projects that have been submitted to the Ministry by the end of 2022 and that will be approved in 2023, it will be possible to account for all capital expenditure under the system of the temporary tax regime of 2020-2021, with minor changes, which significantly improves the economics of the projects. Two key development projects LOTOS E&P Norge – NOAKA and Trell&Trine will be covered by this reduction.
In December 2019, the LOTOS E&P Norge received a draft decision on thin capitalization in 2015-2016. In September 2020, the company submitted a letter to the tax authorities, in which it commented its position to the preliminary decision of the Oil Taxation Office (“OTO”) concerning thin capitalisation in 2015–2016, along with its response to the ‘deviation notice’ for the following years 2017 and 2018. In its preliminary decision, the OTO challenges the inclusion of loans and borrowings service costs and exchange rate differences on debt financing in the company's tax-deductible costs due to the company's equity being too low at that time. In May 2022, the OTO issued its final decision for 2015 -2016, in which the tax surcharge was set at NOK 170 million plus interest.
With regard to the second thin capitalisation case, covering a period of 2017-2019, the Company received a draft decision in August 2022, previously announcing the extension of the investigation period by one year. Under the draft decision the estimated amount to be paid  is NOK 103 million, while the vast majority of this amount relates to financial income from foreign exchange differences that the Company had previously removed from the settlement.. The company was creditworthy during that period, confirmed in RBL models, and, therefore, real effect of thin capitalisation is much less than in 2015-2016.  Furthermore, in its tax declaration for 2017 and 2019 the company did not include in its taxable base, the finance income arising from foreign exchange rates realised on loans in the case of which the OTO had previously questioned the financial costs as deductible. Tax deductions made on this amounted to NOK 88 million (2017: NOK 52 million; and 2019: NOK 36 million). The Company has recognised a provision for these amounts.
In February 2023, the Company received two invoices for payment relating to thin capitalisation of 2015-2016. Due to the tax loss the Company had in these years, the tax surcharge was only accounted for in the 2017 and 2018 returns. The total amount paid was NOK 158.1 million, which is PLN 65 million.
At the same time, on 31 March 2023, the Company appealed against Tax Office decision for 2015-2016. If the appeal is unsuccessful the Company is considering judicial arbitration.  On the same day the Company submitted a written response and reaction to the draft decision on thin capitalisation for 2017-2019.
As at 31 December 2022 the total value of provisions recognised in connection with the pending proceedings amounted to PLN 34 million.

Settlements for natural gas supplied under the Yamal Contract and suspension of natural gas supplies by Gazprom

On 31 March 2021, Decree of the President of the Russian Federation No. 172 “On a special procedure for the performance of obligations of foreign buyers towards Russian natural gas suppliers” (the “Decree”) was published, following which Gazprom requested PGNiG to amend the terms and conditions of the Yamal Contract, among others by introducing settlements in Russian rubles.
On 12 April 2022, the Management Board of PGNiG S.A. decided to continue settling PGNiG's liabilities for gas supplied by Gazprom under the Yamal Contract, in accordance with its applicable terms, and not to consent to PGNiG's performance of its settlement obligations for natural gas supplied by Gazprom under the Yamal Contract, in accordance with the provisions of the Decree.
From 27 April 2022, from 8:00 am CET Gazprom completely suspended natural gas deliveries under the Yamal Contract, citing the Decree's prohibition on delivering natural gas to foreign buyers from countries "unfriendly to the Russian Federation" (including Poland), if payments for natural gas supplied to such countries starting from 1 April 2022, will be made contrary to the terms of the Decree.
In response, PGNiG took steps to protect the Company's interests under its contractual rights, including: call for deliveries and compliance with settlement conditions, etc. terms of the agreement binding the parties until the end of 2022.
By 31 December 2022, natural gas supplies had not been resumed by Gazprom, the supplier refused to make settlements based on the applicable contractual conditions. Pursuant to PGNiG's declaration of intent of 15 November 2019, the Yamal Contract expired at the end of 2022, and disputes arising during its term are pending.

Claim by B. J. Noskiewicz against Exalo S.A.(Exalo) for payment of rent and damages

On 9 February 2015. B.J. Noskiewicze filed an action against Exalo (formerly Poszukiwania Nafty i Gazu Jasło sp. z o.o.) seeking payment of a total of PLN 130 million. The demand of the claim includes an adjudication for a fee for the use of a property owned by the plaintiffs (occupied by the Company for the purpose of drilling a geothermal water well) and compensation for lost income. The plaintiffs claim that the property was not properly returned to them upon completion of the works. Exalo has filed a response to the claim. Exalo argues (based on expert opinions) that it completed the use of the property within the contractual deadline, removed all equipment and movable property, the site was cleaned up and rehabilitated, and therefore properly offered and released the property to the owners in 2012, so that the claim for both any fees for the period after that date and damages is completely unjustified. The proceedings are currently suspended. A full assessment of the risk of an unsuccessful outcome can be made at a later stage of the proceedings taking into account Exalo's arguments. In Exalo's opinion, the claim is without merit.
As at 31 December 2022 the total value of provisions recognised in connection with the pending proceeding amounted to PLN 35 million.

Veolia Energia Warsaw's claim against PGNiG Termika S.A. (Termika)

On 21 February 2018, PGNiG TERMIKA received a claim for payment in respect of the execution of the agreement for services for the development of the heat market in Warsaw, brought by Veolia Energia Warszawa S.A. to the District Court in Warsaw. On 29 June 2018, PGNiG TERMIKA filed a response to the lawsuit, where it addressed the plaintiff's claims. Veolia Energia Warszawa S.A. originally claimed PLN 5.7 million as payment under the agreement, and later extended the claim by PLN 66.6 million, i.e. to PLN 72.3 million, representing further tranches of remuneration under the agreement. Further pleadings are being exchanged in the case. In the opinion of PGNiG TERMIKA, the agreement for the provision of services for the development of the heat market in Warsaw is invalid, as it violated mandatory provisions of law. Due to the precedent-setting and particularly complicated nature of the case in question, it is not possible to assess the risk of an unfavourable outcome.
As at 31 December 2022 the total value of provisions with statutory interest recognised in connection with the pending proceedings amounted to PLN 121 million.

PBG SA (currently under restructuring in liquidation) claim against PGNiG S.A. (currently ORLEN S.A.)

Counterclaim dated 1 April 2019 was filed by PBG SA against PGNiG S.A. for payment of the amount of PLN 118 million, in the case pending before the Regional Court of Warsaw, from a PGNiG S.A. claim against PBG SA, in Wysogotowo, TCM in Paris and Technimont in Mediolan (value of the object of that dispute is PLN 147 million). The cases relate to mutual settlements in the performance of contracts for the upgrade of PMG (the underground gas storage) Wierzchowice. The basis of the claims in the counterclaim is a challenge by PBG SA to the statements of set-off of mutual receivables and liabilities made by PGNiG SA in the course of settling the contracts for the execution of upgrading PMG Wierzchowice. The stage of the proceedings for the counterclaim is identical to that of the main claim, i.e. the evidentiary proceedings are ongoing, the court has heard all witnesses and admitted expert evidence. The defendants in the main claim and the counterclaimant in the counterclaim applied to the court to exclude the expert. A further hearing date was not scheduled.

Except of described above proceedings, the Group has not identified any other significant contingent liabilities.