NEW YORK ( TheStreet) -- Shares of BP ( BP) were trading 1% lower in London after an arbitration tribunal ruled against the company's $8 billion stock swap with Russia's Rosneft.

BP had wanted to partner with Rosneft, Russia's top crude producer, to explore the Arctic. But BP's partners in Russian company TNK-BP argued that the proposed share swap would erode their joint venture's competitive advantage and sued to stop it, The Associated Press reported.

The Russian shareholders won an injunction at Britain's high court and went into arbitration, which was held in secret and is legally binding.

BP, though disappointed by the ruling, said it would still seek to partner with Rosneft, perhaps by buying a stake in the company rather than trading equity, spokesman Robert Wine told AP. Any future agreement on exploration of the Arctic with Rosneft could be coordinated with TNK-BP, he said.

-- Written by Joseph Woelfel

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Copyright 2011 Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

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