157 - Gazprom Export case - Uniper terminates Russian gas supply contracts

SUMMARY:

Uniper has successfully terminated its long-term gas supply contracts with Gazprom Export, securing over €13 billion in damages due to non-delivery of gas, as determined by an arbitration ruling.

In response, Gazprom is pursuing legal action against Uniper and other European companies in Russian courts to obstruct or counter international arbitration. 

KEY TAKEAWAYS:

Contract Termination and Damages: Uniper has terminated its gas supply contracts with Gazprom Export and was awarded more than €13 billion in damages.

Binding Arbitration: The decision of the arbitration tribunal is both legally binding and final.

Gazprom's Legal Challenges: Gazprom is actively contesting these international arbitration proceedings in Russian courts, raising concerns about sanctions and the fairness of trials.

Counterclaims Filed: Gazprom has initiated several counterclaims against European companies in Russian courts to prevent international arbitration.

Significant Financial and Legal Implications: The Uniper case underlines the considerable financial impacts and legal intricacies resulting from Russia's reduction of gas supplies to Europe.

Future EU Gas Supply Impacts: This ruling could have profound implications for future gas supplies to the EU and ongoing negotiations.

Exploring Alternative Transit Routes: Various European stakeholders are evaluating alternative gas transit routes, including those through Ukraine.

DATA:

12 June 2024 - Düsseldorf, Uniper terminates Russian gas supply contracts

• Formal end to gas supply relationship with Gazprom Export after positive ruling for Uniper in arbitration proceedings 
• Arbitration tribunal has awarded Uniper the right to terminate its long-term gas supply contracts and an amount of more than €13 billion in damages for non-delivery of gas 
• Uniper CEO Michael Lewis: “The ruling provides legal clarity for Uniper” 

Uniper decided today to terminate its long-term Russian gas supply contracts and thus legally ended the long-term gas supply relationship with the Russian state-owned company Gazprom Export. The decision was made possible after an arbitration tribunal on June 7 awarded Uniper the right to terminate the contracts and awarded it an amount of more than €13 billion in damages for the gas volumes not supplied by Gazprom Export since mid-2022. Although only limited gas volumes had been delivered since June 2022 and no gas volumes since the end of August 2022, the long-term gas supply contracts between the two companies were still legally in force and individual contracts would have continued to exist until the mid-2030s.

After Uniper suffered substantial losses due to the Russian gas supply restrictions, the company initiated arbitration proceedings against Gazprom Export at the end of 2022. The option of dispute resolution via an arbitration tribunal was contractually agreed and had in the past in respect of other disputes been invoked repeatedly by both sides. The tribunal, seated in Stockholm, ruled in accordance with Swiss law. The arbitration ruling is legally binding and final.

7 May 2024 - Uniper appeals Russian court ruling as legal tussle with Gazprom drags on

Uniper, opens new tab has appealed a Russian court decision requiring the German utility to pay more than 14 billion euros ($15 billion) if it continues arbitration proceedings against its former main gas supplier Gazprom, opens new tab, it said on Tuesday.

24 May 2024 - Russian court bans Czech CEZ from disputing with Gazprom Export abroad

The Arbitration Court of St. Petersburg and the Leningrad Region has upheld Gazprom Export's claim against the Czech Republic’s CEZ banning it from continuing foreign arbitration proceedings, a TASS correspondent reported from the courtroom.

In case of violation of the ban, the court ruled to recover 57.7 mln euro from the Czech company in favor of Gazprom Export.

 27 May 2024 - European court tells Gazprom not to run away from its responsibility for halting gas supplies

Gazprom's counter-claims

Since the end of last year, Gazprom Export has filed 11 counterclaims with the same arbitration court in St. Petersburg, Russia, against its former European customers and shippers.

The company has already obtained eight rulings in writing, ordering European companies to halt their international arbitration proceedings or pay penalties in Russia.

Russian arguments

In eight already rubber-stamped rulings, the court in St. Petersburg argued that the arbitration cases against Gazprom Export should be moved to Russia because Gazprom Export will be unable to have a fair trial in courts in so-called “unfriendly nations”.

In 2022, Moscow designated more than 50 foreign states as “unfriendly” after they approved wide-ranging sanctions against Russia in response to its invasion of Ukraine.

The Russian court has lashed out at European sanctions, saying in rulings that Russian lawyers who could have represented Gazprom Export in arbitration hearings in Europe face the denial of entry visas, while their laptops and smartphones may be confiscated by authorities on arrival. 

13 March 2024 - Russian court bans Uniper subsidiaries from disputing with Gazprom Export abroad

In case of violation of the ban, the court ruled to recover 14.3 billion euros from German companies in favor of Gazprom

Lawyers for Gazprom Export stated the impossibility of equal adversarial participation in foreign arbitration due to sanctions against Russia and Russian companies, as well as due to the lack of complete freedom to choose legal services, since some European law firms publicly announced their refusal to work with companies from Russia.

About legal dispute

In late November 2022, it became known that the German concern Uniper filed a lawsuit against Gazprom Export to compensate for losses incurred from the short supply of Russian gas. Uniper then estimated the current costs of replacing Russian gas at no less than 11.6 billion euros. The Russian company, in turn, stated that it was studying the received statement of claim from Uniper, but did not recognize the violation of contracts and the legality of the German company’s stated claims for damages.

Uniper considered the force majeure declared by Gazprom on gas supplies to be a violation of the contract. Since the end of August 2022, the German concern has completely stopped receiving gas from Russia and considers this a violation of contractual obligations on the part of Gazprom. Uniper stated that it does not expect the resumption of Russian gas supplies and is awaiting a decision in the court case with Gazprom Export due to their termination in 2024.

Previously, Gazprom also filed lawsuits in the Russian court against the Polish Orlen, the Dutch gas transport company Gasunie Transport Service (GTS), the Czech NET4GAS, Naftogaz of Ukraine and the Polish-Russian company Europol GAZ, which owns the Polish section of the Yamal-Europe gas pipeline, demanding prohibit the continuation of arbitration proceedings in foreign courts. For the last three lawsuits, the Russian company achieved a ban on the continuation of arbitration, for the lawsuit against GTS, the court hearing is scheduled for March 15, for Orlen - for April 10. 

16 March 2023 -  Gazprom in arbitration proceedings with ENI, Engie, RWE, PGNIG, Gasum, Naftogaz - report

Ukraine's Naftogaz has requested arbitration against Gazprom at the International Chamber of Commerce's International Court of Arbitration. Naftogaz is demanding payment for services not rendered by it under an agreement on the provision of services for the transportation of natural gas through the territory of Ukraine dated December 30, 2019. On September 27, Gazprom sent letters of objection regarding arbitration's jurisdiction to consider the demands of Naftogaz due to a fundamental change in circumstances. On February 15, 2023, Gazprom was notified by the ICC secretariat about a decision by the ICA to allow the arbitration tribunal to consider the case on the merit. Gazprom currently has no information as to whether an arbitration tribunal has been formed.

Finland's Gasum Oy on May 13, 2022, notified Gazprom Export LLC that arbitration proceedings had commenced on the termination of the contract for natural gas supply dated March 12, 1994 and the cancellation of obligations to pay invoices previously served to it. A ruling was issued on November 14, 2022. Gasum's claims and Gazprom Export's counterclaims were partially satisfied. The arbitration tribunal, among other things, ordered Gasum Oy to pay Gazprom Export LLC debt of more than 300 million euros for gas supplies and in connection with the failure to honor a take or pay obligation, as well as interest for payment arrears. In addition, the tribunal recognized the issuance of a Russian presidential decree No. 172 dated March 31, 2022 on the transition to payment for gas in rubles as a force majeure circumstance under the contract and confirmed the legitimacy of the suspension of natural gas supplies in the event the buyer fails to pay in rubles in accordance with the Decree No. 172. The tribunal also ordered the parties to continue negotiations on the contract in order to resolve the situation with further gas supplies.

*******

12 June 2024 - ICIS VIEW: Uniper arbitration award could shape future EU gas supplies

Given the sheer size of the award and the estimated 25 billion cubic meters that Uniper imported annually from Russia before Gazprom Export curtailed them, there is no doubt that the steps taken by Uniper to recover the award could impact future gas supplies to Europe at least in the mid term.

The award made on 7 June came nearly three weeks after Austria’s OMV Gas Marketing and Trading, which has a long-term supply contract with Gazprom Export, said it had received a notice from an unnamed European company seeking to seize payments due to the Russian producer as part of a court ruling.

 FALLING PRODUCTION:

This makes it mindful of the fact that low production could lead to shut-ins with irreversible damage to gas wells.

The alternative for Uniper and Gazprom, therefore, might be to settle for an option where Gazprom would keep its production going while Uniper would receive the equivalent of the award’s financial value in natural gas deliveries.

The issue may in fact gather momentum as various European stakeholders are now considering the possibility of continuing the transit of gas through Ukraine once the existing agreement expires on 1 January 2025.

It may not be mere coincidence that just hours before Uniper announced the arbitration award, the German economy minister Robert Habeck said Europe was engaged in ‘intense’ work to keep gas flowing via Ukraine.

 

***

- INDEX -

***

Uncovering the truth took over two years of self-funded, tireless investigation.

I decided to open it for free, no paywall, despite huge investment.
Because the truth matters.
Please consider supporting my work with a donation.

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156 - Nordstream affair - Does this mean the red phone is working again?

There is no real "RED PHONE"

It is more analogy for a secure direct de-escalation link.

[Extra: Small history lesson about the RED PHONE] 

SUMMARY:

This post raises concerns about potential legal repercussions for the US, UK, and Norway, while highlighting top level communication between the US and Russia through the so called "red phone" channel.

KEY TAKEAWAYS:

The blog asserts that the US had prior knowledge of the UK's intentions to destroy the Nord Stream pipelines but chose not to intervene, was unable, or started to cooperate with the perpetrator choosing the position suiting best its own strategy thus coordinating their moves along, synchronizing the UK´s mission plans but hidden in order not to alleviate its ally Germany, France and other EU states.

Would this hypothesis proven correct that the USA was in a position to stop the attack but has deliberately passed the responsibility to its allies or has consciously chosen not to do so could be an issue handled by the international court and it could also seriously upset the Trans-Atlantic alliance.

The author posits that there could be legal accountability for the actions of the US, UK, and Norway regarding this incident and that is also the reason for the media blanket over the case.

Communication channels between the US and Russia, notably the "red phone," are referenced in relation to the events.

It is suggested that the US took steps to de-escalate tensions with Russia in the lead-up to the Nord Stream incident.

The potential for legal actions is explored, including scenarios involving the International Court of Justice and the International Criminal Court.

 

DATA: 

 25 Sept 2022 - Meet the Press - National Security Advisor Jake Sullivan, Rep. Jamie Raskin (D-Md.), Rep. Nancy Mace (R-S.C.), Sara Fagen, Mike Memoli, Amna Nawaz and Jen Psaki

...Globally, the existential threat to democracy is Vladimir Putin, whose decision to invade Ukraine has produced the biggest conflict in Europe since the Second World War. Putin is now threatening to use Russia's nuclear weapons, saying in a televised address, "This is not a bluff." President Biden responded at the United Nations. 

CHUCK TODD:

While you were talking, we were able to show some footage of people voting with – under the supervision of armed Russian guards, so just to give folks a taste of what kind of referendum this is. I want to talk about the nuclear threats from Vladimir Putin.There was a report this week that folks in the Biden administration have made it clear, privately, of the severe consequences. Does this mean the red phone is working again? Because at the beginning of this conflict there was a lot of concern that some of the basic communications that we had from military to military, intel to intel, you had a hard time getting your counterparts to return calls. Does this mean the red phone is working again?

JAKE SULLIVAN:

Well, Chuck, we've been careful to protect the timing and the content of the conversations we have with the Russian government, with the Kremlin.

But the answer to your question is yes.

We do have the capacity to speak directly at senior levels and to be clear about our messages to them and to receive their messages.

That has happened frequently over the course of the past few months.

It has happened even in just the last few days.

Update: 

20/11/2024 - RU: Peskov: "Red phone" between Moscow and Washington is not in use

Kremlin spokesman Dmitry Peskov said that the special telephone line, which was established for communication between Moscow and Washington after the Cuban crisis, is currently not in use.

"We have a special secure line for communication between the two presidents - Russia and the USA. Moreover, even for video communication," said Peskov.

Summary (see also other posts) partial result, more research needed:

The USA started to de-escalate before the Nordstream affair happened.

The USA had a knowledge about the UK´s plan to blow up Nordstream pipelines

The USA did not stop the mission

The USA decided to step aside and protect NATO cohesion

This is why Russia later blamed Anglo-Saxons as guilty and not a single state. 

Legally:

The UK could be charged under Violation of sovereignty (Act of Aggression, Violation of the United Nations Charter), Sabotage or International Terrorism and/or Environmental damage.    

The USA and Norway could be charged under Complicity in Aggression, Failure to prevent, Neglecting duty to act.  

Legal Accountability and Consequences

1. International Court of Justice (ICJ):

• State Responsibility: Russia and Nordstream AG hareholders (the victim) could bring a case against States USA, Norway, and the main perpetrator the UK in the ICJ for violations of international law, including aggression and failure to prevent an unlawful act.

• United Nations Security Council (UNSC):

  • Security Council Action: The UNSC could be called upon to address the situation, potentially leading to sanctions or other measures against the UK, and possibly against other States for their roles.

• International Criminal Court (ICC):

• Individual Accountability: Leaders or individuals in the UK who planned and executed the "sabotage" (or the unlawful act) could potentially be prosecuted by the ICC for crimes of aggression or terrorism, depending on the circumstances and evidence.

RELATED POSTS:

113 - Russian nuclear positioning before the Nordstream is attacked

069 - Was Norway briefing USA about possible threat to undersea pipeline infrastructure on 19-09-2022?

094 - The USA de-escalates possible Russian nuclear response even before Nordstream is hit, NATO protect Trans-Atlantic alliance afterwards

 

199 - Consistency of Russian claims about Nordstream affair

***

- INDEX -

***

Uncovering the truth took over two years of self-funded, tireless investigation.

I decided to open it for free, no paywall, despite huge investment.
Because the truth matters.
Please consider supporting my work with a donation.

Every bit helps keep this mission alive!

mortymer001

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155 - Nord Stream 2 AG and INVESTMENT TREATY ARBITRATION European Union

SUMMARY:

This blog post outlines the legal struggles encountered by Nord Stream 2 AG, the operator of the Nord Stream 2 pipeline. It covers investor-state dispute settlement (ISDS) claims under the Energy Charter Treaty, challenges regarding EU pipeline regulations, and the resulting bankruptcy proceedings exacerbated by multiple court-ordered moratoriums. 

KEY TAKEAWAYS:

Legal Challenges: Nord Stream 2 AG confronted significant legal hurdles after the German government suspended the pipeline's certification, which raised concerns about potential ISDS claims under the Energy Charter Treaty. 

EU Court Involvement: The EU's highest court partially accepted Nord Stream 2 AG's challenge against EU pipeline regulations, highlighting ongoing tensions within regulatory frameworks. 

Impact of Geopolitics: Even with some legal victories, the future of the pipeline was severely threatened by the outbreak of war in Ukraine, coupled with Germany's withdrawal of support. 

Rescue Attempts: To stave off insolvency, Nord Stream 2 AG was granted several court-approved moratoriums. 

European Commission's Role: The European Commission represented the European Union in the investor-state arbitration initiated by Nord Stream 2 AG, reflecting the intricate relationship between member states and EU regulations. 

Complexity of Investment Treaties: The blog highlights the intricate nature of investment treaty arbitration involving the European Union, showcasing the balance of interests at play. 

DATA:

SOURCE:

File: 2023_Investment_Treaty_Arbitration_-_European_Union.pdf

24 Feb 2022 - The German government has been worried about being sued by the fossil fuel companies behind the Russian gas pipeline under the Energy Charter Treaty

After Russian tanks rolled into Ukraine on Tuesday, German chancellor Olaf Scholz finally decided to halt the certification of the Nord Stream 2 gas pipeline linking Germany and Russia.

But why has the German government delayed this decision for so long? And why did Scholz merely halt the certification rather than cancelling it?

The words of German environment minister Svenja Schulze from last February give a clue. “We also run the risk of ending up in international arbitration courts with compensation claims if we stop the project,” she said.

Her warning added to a growing list of ministers admitting that they feared investor-state-dispute settlement (ISDS) claims under the Energy Charter Treaty (ECT), of which Germany is one of 53 members.

12 July 2022 - The Court declares the action brought by Nord Stream 2 AG

...against the directive extending certain rules of the internal market in natural gas to pipelines from third countries to be partially admissible. 

 12 July 2022 - Gazprom’s Shunned Nord Stream 2 Wins Spat Over EU Pipeline Rules

EU top court says gas project’s challenge is admissible

Lower EU court will have to rule on substance of dispute

Russia’s shunned Nord Stream 2 gas pipeline won a legal boost in its pre-war challenge against European Union rules that subjected all new and existing pipelines involving foreign suppliers to the EU’s energy market-opening requirements, after the bloc’s top court said its appeal can be heard.

While the ruling is a win for Nord Stream 2, its impact may have been overtaken by events in Ukraine, which led Germany to withdraw its backing for the project.

12 July 2022 - EU top court backs operator of shelved Nord Stream 2 pipeline

The operator of Nord Stream 2, a pipeline designed to double Russia's gas exports to Germany, won an appeal in the EU's top court on Tuesday after challenging European Union rules that require separate companies to build, operate and own pipelines.

12 July 2022 - Gazprom’s Shunned Nord Stream 2 Wins Spat Over EU Pipeline Rules
EU top court says gas project’s challenge is admissible
Lower EU court will have to rule on substance of dispute

Russia’s shunned Nord Stream 2 gas pipeline won a legal boost in its pre-war challenge against European Union rules that subjected all new and existing pipelines involving foreign suppliers to the EU’s energy market-opening requirements, after the bloc’s top court said its appeal can be heard.

While the ruling is a win for Nord Stream 2, its impact may have been overtaken by events in Ukraine, which led Germany to withdraw its backing for the project.

12 July 2022 - Judgment of the Court in Case C-348/20 P | Nord Stream 2 v Parliament and Council

12 July 2022 - The Court declares the action brought by Nord Stream 2 AG against the directive

... extending certain rules of the internal market in natural gas to pipelines from third countries to be partially admissible 

13 July 2022 - EU and US welcome Canada's decision to return Russian turbine to Germany

13 July 2022 - EU court points to future resurrection of Russian gas pipe

8 Sept 2022 - Swiss court gives Nord Stream 2 more time to avoid insolvency.

In May, the court granted a provisional moratorium against bankruptcy proceedings for the first time, which was valid until September 10. This period has now been extended by another four months.

The Swiss company behind the Russian gas pipeline Nord Stream 2 has received a four-month extension to try to repay its debts.

8 Sept 2022 - Gazprom unit granted Nord Stream 2 debt restructuring moratorium extension

Nord Stream 2 AG will not go bankrupt at least until 10th of January 2023 thanks to another decision from Zug court. 

 10 Sept 2022 - Nord Stream 2 gas link operator wins further stay of bankruptcy: court

On May 11, Switzerland-based Nord Stream 2 AG was awarded a provisional stay of bankruptcy until Sept. 10 2022, according to a notice in the Swiss Official Gazette of Commerce.

In a new notice dated Sept. 8, a court in Zug awarded a four-month extension of the stay of bankruptcy from Sept. 10 until Jan. 10, 2023.

There have been calls from within Germany in recent weeks to allow Nord Stream 2 to begin operations after flows through the first Nord Stream system were curtailed and then halted altogether, with gas prices having surged to new records as a result.

 28 Dec 2022 - Nord Stream 2 pipeline firm gets 6-month stay of bankruptcy

A Swiss court has granted a six-month “stay of bankruptcy” to the operating company for the never-opened Nord Stream 2 pipeline, which was built to bring Russian gas to Germany but put on ice shortly before Russia invaded Ukraine in February.

Nord Stream 2 AG, a subsidiary of Russia’s Gazprom, is based in Zug. Nord Stream 2′s court-appointed administrator, Transliq AG, sought the extension. 

INVESTMENT TREATY ARBITRATION European Union

...However, CETA, EUSIPA and EUVIPA do not specify which institution of the European Union must be served with the ‘notice to submit a claim’, and, potentially, with the notice of arbitration. 

CETA merely provides (article 8.23.8) that the European Union and Canada will notify each other of the place of delivery of notices and other documents by the investors and that this information will be made publicly available. EUSIPA and EUVIPA do not contain such a provision. 

As a default, it is the European Commission that represents the European Union in international judicial proceedings. 

So far, only one investor-state arbitration has been initiated against the European Union (pursuant to the UNICTRAL Arbitration Rules 1976 and the Energy Charter Treaty (ECT) ). Based on publicly available information, the claimant (Nord Stream 2 AG) served the notice for arbitration on the EU Commission represented by its president and other senior officials (such as the Director-General for the EU Commission’s Legal Service and the Director-General for Trade). 

Law stated - 19 October 2022

UPDATE 06-03-2025

Arbitration Risks for Germany if Certification Stop Becomes Final

If Germany’s decision to halt Nord Stream 2’s certification—initially paused in February 2022 and effectively stalled since—becomes a permanent stop, it could trigger significant arbitration risks under international investment law, particularly through the Energy Charter Treaty (ECT). 

Nord Stream 2 AG, a Swiss-registered company wholly owned by Russia’s Gazprom, has already initiated arbitration proceedings against the EU (PCA Case No. 2020-07), but Germany, as the pipeline’s landfall state, could also face direct or related claims.

Legal Basis for Claims: Nord Stream 2 AG could argue that Germany’s refusal to certify the pipeline violates its obligations under the ECT, specifically Article 10(1), which mandates "fair and equitable treatment" (FET) and protection against "unreasonable or discriminatory measures." The company might also invoke Article 13 (expropriation) or Article 10(7) (national treatment and most-favored-nation status), though FET is the most likely cornerstone. The argument hinges on "legitimate expectations"—a key principle in investment arbitration—where investors rely on host state actions (like issuing permits) to justify their investments.

Legitimate Expectations: As Gabriel Lentner noted in the Tagesspiegel Background interview cited by Clean Energy Wire, Nord Stream 2 AG could point to "positive signals" from Germany, such as construction permits granted in 2018 by the Stralsund Mining Authority and federal approvals under Merkel’s government. These actions, alongside Germany’s historical support for the project (e.g., classifying it as a commercial venture), could be framed as creating a reasonable expectation of certification. Arbitration tribunals often assess whether a state’s conduct—permits, assurances, or regulatory stability—induced significant investment (here, $11 billion), only for later actions to undermine it without compensation.

Damages at Stake: If a tribunal finds Germany liable, the financial exposure could be massive. Nord Stream 2 AG has suggested losses exceeding €8 billion, though claims could escalate to cover the full project cost plus lost profits—potentially €9–11 billion or more, given Gazprom’s investment and the pipeline’s intended 55 bcm annual capacity. Under ECT Article 26, compensation typically reflects "fair market value" before the breach, a figure that could dwarf Germany’s initial economic calculus for halting certification.

Germany’s Defenses and Risks: Germany might counter that its regulatory sovereignty—exercised via the February 2022 suspension amid Russia’s Ukraine aggression—justifies the stop. However, 

Lentner’s point is critical: tribunals often discount "changing political situations" (like the Ukraine crisis) as a valid excuse unless tied to objective, non-discriminatory necessity (e.g., public security under ECT Article 24). Germany’s prior approval of Nord Stream 1 and its energy dependence on Russia could weaken claims of consistent policy. If the stop is deemed final, arbitrary, or disproportionate, Germany risks losing, as tribunals prioritize investor stability over post-hoc political shifts.

Arbitration Framework: Germany is bound by the ECT (signed 1994, ratified 1997) and the ICSID Convention (ratified 1969), offering Nord Stream 2 AG multiple arbitration venues. German arbitration law (ZPO Section 1025 et seq.) aligns with the UNCITRAL Model Law, granting tribunals broad autonomy to assess FET breaches. The EU’s 2019 Gas Directive amendment, which Germany applied, might also be challenged as discriminatory (a “lex Nord Stream 2”), amplifying the case’s complexity.

In short, a final certification stop risks exposing Germany to a costly arbitration loss, with Nord Stream 2 AG leveraging legitimate expectations against a politically motivated reversal. The precedent of Strabag v. Germany (ICSID, 2019), where regulatory shifts in renewables prompted ECT claims, underscores this vulnerability.

Why the February 2022 Certification Pause Was Likely Temporary

The certification pause announced by Chancellor Olaf Scholz on February 22, 2022—ordering the Economy Ministry to withdraw the supply security report—appears designed as a temporary measure rather than a permanent end, driven by strategic and legal considerations:

Political Leverage: As Jake Sullivan articulated on February 6, 2022, the U.S. and Germany viewed Nord Stream 2’s non-operational status as “leverage for us, not Vladimir Putin.” The pause, enacted days before Russia’s invasion, aimed to deter aggression by threatening Russia’s economic gains without irrevocably killing the project. Scholz’s vague “severe consequences” rhetoric and Biden’s February 7 pledge to “bring an end to it” suggest a reversible stance tied to Russia’s actions, not a definitive closure.

Legal Flexibility: By withdrawing the security report rather than rejecting certification outright, Germany kept the process in limbo—avoiding a final decision that could trigger immediate arbitration. Under German energy law (EnWG) and EU Directive 2009/73/EC, certification requires a positive security assessment, but pausing it sidesteps a formal denial. This aligns with Merkel’s earlier deal with the U.S. (July 2021), which allowed certification unless Russia weaponized energy—a condition met by February 2022, justifying a temporary hold.

Arbitration Avoidance: A temporary pause mitigates arbitration risks by preserving Nord Stream 2 AG’s hope of eventual approval, delaying claims. A final stop, as Lentner implies, would solidify the breach of legitimate expectations, given prior permits and investments. The ECT’s three-month cooling-off period (Article 26) had already been tested by Nord Stream 2 AG against the EU in 2019; Germany likely sought to avoid a parallel claim by keeping the door ajar.  Germany might certify post-war to dodge a €9 billion payout.

Energy Pragmatism: Germany’s reliance on Russian gas (39% of imports in 2021) and soaring prices in 2022 (spot market peaking at $30/mmBtu) made a permanent halt unpalatable. The pause allowed time to secure LNG (e.g., U.S. exports up 63% in 2022) while retaining the pipeline as a future option, balancing geopolitics and energy needs.

Lentner’s Insight: The quote highlights why the pause was tactical: tribunals prioritize investor expectations (permits issued) over political crises (Ukraine). A temporary suspension could be framed as a proportionate response, not a capricious end, reducing Germany’s legal exposure if challenged.

CONCLUSION:

In conclusion, the February 2022 pause was likely a temporary gambit—using Nord Stream 2 as a geopolitical bargaining chip while dodging the arbitration fallout of a final stop. A permanent halt risks billions in damages, hinging on Germany’s inability to justify overturning Nord Stream 2 AG’s expectations amidst a crisis it didn’t foresee when permits were granted. The pause bought time, not closure.

RELATED POSTS:

160 - January 2022 - Nord Stream 2 AG has founded a German subsidiary Gas for Europe Gmb

132 - Despite explosions: The NordStream companies in Zug live on

174 - October 2022 - Putin: Gas spot price change caused 2% loss of European GDP

157 - Gazprom Export case - Uniper terminates Russian gas supply contracts

***

- INDEX -

***

Uncovering the truth took over two years of self-funded, tireless investigation.

I decided to open it for free, no paywall, despite huge investment.
Because the truth matters.
Please consider supporting my work with a donation.

Every bit helps keep this mission alive!

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154 - UNCLOS - The United Nations Convention on the Law of the Sea AND Nordstream

UNCLOS

The United Nations Convention on the Law of the Sea was adopted in 1982. It lays down a comprehensive regime of law and order in the world's oceans and seas establishing rules governing all uses of the oceans and their resources.

Article 58 

Rights and duties of other States in the exclusive economic zone 

1. In the exclusive economic zone, all States, whether coastal or land-locked, enjoy, subject to the relevant provisions of this Convention, the freedoms referred to in article 87 of navigation and overflight and of the laying of submarine cables and pipelines, and other internationally lawful uses of the sea related to these freedoms, such as those associated with the operation of ships, aircraft and submarine cables and pipelines, and compatible with the other provisions of this Convention.

2. Articles 88 to 115 and other pertinent rules of international law apply to the exclusive economic zone in so far as they are not incompatible with this Part.

3. In exercising their rights and performing their duties under this Convention in the exclusive economic zone, States shall have due regard to the rights and duties of the coastal State and shall comply with the laws and regulations adopted by the coastal State in accordance with the provisions of this Convention and other rules of international law in so far as they are not incompatible with this Part. 

Article 59 

Basis for the resolution of conflicts regarding the attribution of rights and jurisdiction in the exclusive economic zone In cases where this Convention does not attribute rights or jurisdiction to the coastal State or to other States within the exclusive economic zone, and a conflict arises between the interests of the coastal State and any other State or States, the conflict should be resolved on the basis of equity and in the light of all the relevant circumstances, taking into account the respective importance of the interests involved to the parties as well as to the international community as a whole.

Jurisdiction related:

CASE NS 1

Nord Stream AG, the operator of the Nord Stream 1 and 2 pipelines, 

filed a lawsuit in February 2024 at London’s High Court 

against insurers Lloyd’s Insurance Company, Arch Insurance (EU) DAC, 

and others, seeking over €400 million for damages 

from the September 26, 2022, explosions.

CASE NS 2

Unknown, no data available.

***

I. NORDS STREAM AG CASE

Legal implications if the UK if found to be the perpetrator

The company estimates total repair costs (dewatering, stabilizing, repairing, and replacing lost gas) at €1.2 billion to €1.35 billion. The insurers deny coverage, arguing the damage falls under “war risk” exclusions, suggesting it was “more likely than not” caused by a government actor.

The case, as currently defined, is a commercial insurance dispute under English law, governed by the policies’ terms and the High Court’s jurisdiction over contractual claims. Nord Stream seeks payment under its primary and excess all-risk policies, treating the explosions as insurable events, while the insurers counter that sabotage tied to geopolitical conflict voids coverage.

The commercial dispute might become a bargaining chip in broader UK-EU-Russia tensions, with the UK’s alleged act redefining it as a test of accountability.

1. Redefining the Case: From Contract to Tort or State Responsibility

Current Definition: A contractual dispute over insurance coverage, governed by English law principles (e.g., Insurance Act 2015, policy interpretation). Nord Stream AG must prove the explosions are covered “all-risk” events; insurers must justify exclusions.

UK Perpetrator Scenario: If evidence emerged implicating the UK, the case could expand beyond contract law:

Tort Claim: Nord Stream AG could amend its claim to allege tortious interference or negligence by the UK, a third party to the contract. This would require proving the UK’s actions directly caused the uninsured loss, shifting focus from policy terms to liability.

State Responsibility: Internationally, the UK could face claims under customary international law for unlawful interference with infrastructure in Denmark’s exclusive economic zone (EEZ), where the blasts occurred. Nord Stream AG, as a Swiss entity with Western shareholders, could push its home states (Switzerland, Germany) to pursue this, though the London case remains commercial.

Impact on Definition: The High Court case might split into parallel tracks: (1) the original insurance dispute, with insurers arguing a government act (UK’s) triggers exclusions, and (2) a potential third-party claim against the UK, complicating jurisdiction and evidence.

2. Insurers’ Defense and the ‘Government Actor’ Argument

Current Stance: Insurers assert the explosions were “more likely than not” government-ordered, invoking war-risk exclusions. They haven’t named a perpetrator, relying on Swedish and German findings of explosive traces to imply sabotage tied to the Russia-Ukraine conflict.

UK Implication - If the UK were proven responsible:

Strengthens Defense: The insurers’ exclusion argument gains traction—a UK military or intelligence operation could be framed as an “act of war” or “hostile act,” even if not formally declared. English courts have upheld such exclusions broadly (e.g., Pan American v. Aetna, 1974, on terrorism).

Legal Risk for Insurers: Naming the UK could expose them to political pressure or discovery demands from Nord Stream AG, forcing disclosure of any UK-insurer communications. This is unlikely unless concrete evidence (e.g., leaks, German probe findings) surfaces.

Case Evolution: The insurers might pivot to demand UK government intervention or indemnification, turning a private dispute into a quasi-public one.

3. Nord Stream AG’s Position and Corporate Structure

Multinational Leverage: With 49% Western ownership, Nord Stream AG could rally German, Dutch, and French shareholders to pressure their governments if the UK were implicated. This could escalate the case diplomatically, though the High Court claim remains shareholder-agnostic.

Swiss Neutrality: As a Swiss entity, Nord Stream AG might seek Swiss diplomatic protection against the UK under international law, separate from the London case. This wouldn’t alter the commercial claim but could influence settlement talks.

Nord Stream 2 AG’s Role: If Nord Stream 2 damages dominate repair costs, Nord Stream AG might face challenges proving its standing to claim them, given Nord Stream 2 AG’s separate ownership. The UK scenario wouldn’t change this but could spotlight Gazprom’s 100% control of Nord Stream 2 AG, fueling insurer arguments of Russian state involvement.

Case Definition Shift: Nord Stream AG might reframe its claim to emphasize sabotage by a NATO member (UK), arguing it’s not a “war risk” between Russia and Ukraine, but a distinct act—potentially covered under all-risk policies.

4. Jurisdictional and Procedural Implications

High Court Limits: The Commercial Court’s jurisdiction is contractual; it can’t adjudicate UK state liability directly without the UK as a party. Nord Stream AG would need a separate action (e.g., tort claim) or join the UK as a third party, requiring evidence and UK consent to waive immunity.

State Immunity: Under the UK State Immunity Act 1978, the UK enjoys immunity for sovereign acts (e.g., military operations) unless deemed commercial. Sabotage wouldn’t qualify, likely barring direct High Court action against the UK.

Evidence Hurdle: Proving UK involvement would rely on classified data (e.g., MI6, Royal Navy records). The German investigation’s August 2024 warrant for a Ukrainian suspect suggests no UK link yet; shifting this narrative would need leaks or whistleblowers—beyond Nord Stream AG’s current reach.

Case Recharacterization: The dispute could stall in the High Court, pushing Nord Stream AG to international forums (e.g., UNCLOS arbitration) if the UK’s role were confirmed.

5. International Law Overlay

UNCLOS Violation: The blasts occurred in Denmark’s EEZ. If the UK acted, it might breach UNCLOS Article 87 (freedom of the high seas, including pipeline laying) or Article 113 (intentional damage to cables/pipelines). Denmark or affected states could claim jurisdiction, sidelining the London case.

State-to-State Action: Switzerland or Germany, protecting Nord Stream AG’s interests, could sue the UK at the International Court of Justice (ICJ). This wouldn’t redefine the High Court case but could pressure a settlement.

Case Impact: The commercial dispute might become a bargaining chip in broader UK-EU-Russia tensions, with the UK’s alleged act redefining it as a test of accountability.

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II. NORDS STREAM 2 AG CASE

Legal implications if the UK if found to be the perpetrator

Nord Stream 2 AG: A private entity incorporated in Switzerland, fully owned by Gazprom, a Russian state-controlled company (51%+ owned by Russia).

International Law Lens: The definitions hinge on attribution, intent, target, location, and consequences, assessed under jus ad bellum (law governing the use of force), UNCLOS (maritime law), and state responsibility principles.

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POSSIBLE FUTURE DEVELOPMENTS

Scenarios Under International Law

UK Denies Involvement: Claims rogue actors or misattribution. Russia seeks ICJ adjudication, alleging UK state responsibility (ILC Art. 8—control over actors). Outcome hinges on evidence; sabotage label persists absent proof.

UK Admits Covert Act: Frames it as countering Russian aggression (e.g., Ukraine war). Russia claims "armed attack"; UK counters it’s not against Russia directly (Swiss entity). UNSC deadlock ensues—saboteurs face no legal reckoning.

Overt UK Military Strike: Declared as preemptive defense (Art. 51). Russia escalates to "act of war" or "casus belli," retaliating militarily. NATO "could" invoke collective defense (Art. 5), risking wider conflict. "Armed attack" becomes operative. 

The Article 5 may not apply IF the UK stroke first.

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TORF CLAIM

What is a "Tort Claim"?

A tort claim is a legal action under civil law where one party (the claimant) seeks compensation or remedy from another party (the defendant) for a wrong or harm caused by the defendant’s actions, rather than a breach of contract. "Tort" comes from the French word for "wrong," and in English law (which governs the Nord Stream case in London), it covers civil wrongs like negligence, trespass, or intentional damage. Unlike criminal law, which punishes offenders (e.g., jail time), tort law focuses on making the victim whole—usually through monetary damages.

Key elements of a tort claim: 

1. Duty: The defendant owed a legal duty to the claimant (e.g., not to harm their property).
2. Breach: The defendant breached that duty (e.g., by acting negligently or intentionally).
3. Harm: The claimant suffered damage (e.g., financial loss, physical destruction).
4. Causation: The breach directly caused the harm.

How "Tort Claim" Applied in the Nord Stream Context

In my analysis, I suggested that if the UK government were proven to have destroyed the Nord Stream pipelines, Nord Stream AG (the claimant in the High Court case) could expand its lawsuit beyond the original insurance dispute against Lloyd’s and Arch Insurance. Here’s how a tort claim fits:Original Case: Nord Stream AG sued its insurers for €400 million, claiming the explosions were covered under their "all-risk" policies. This is a contractual dispute—it’s about whether the insurance policies apply, governed by the terms agreed between Nord Stream AG and the insurers.

Hypothetical UK Perpetrator: If evidence showed the UK caused the explosions, Nord Stream AG could pivot to a tort claim against the UK as a third party, arguing that the UK’s actions directly caused their uninsured losses (e.g., €1.2–1.35 billion in repair costs). 

This shifts the focus from "Did the insurers owe us money?" to "Did the UK wrongfully harm us?"