Court bans Wintershall Dea from suing Russia in The Hague
The Moscow Arbitrazh (Commercial) Court has upheld a lawsuit filed by the Russian Prosecutor General's Office against Germany's Wintershall Dea GmbH, its law firm Aurelius Cotta, and international arbitrators Charles Poncet and Olufunke Adekoya, to prohibit them from continuing and supporting proceedings against Russia at the Permanent Court of Arbitration in The Hague (Netherlands). This was reported by Kommersant.
According to the court ruling, if the ban is violated, €7.5bn stands to be recovered from the participants of the foreign proceedings in favour of the Russian state. According to the newspaper, the recovery may be imposed on the German corporation's shares in Russian companies.
The fact that Prosecutor General's Office filed the lawsuit became known in April. This was a reaction to international investment arbitration proceedings initiated by Wintershall Dea against Russia with a claim for compensation amounting to €7.5bn. In particular, the Russian Prosecutor General's Office claimed that the proceedings in The Hague were unlawful, with the court consisting mainly of representatives of countries unfriendly to Russia. In the same month, the Moscow Arbitrazh (Commercial) Court ordered Wintershall Dea, law firm Aurelius Cotta and other defendants to suspend proceedings against Russia and imposed interim measures on the defendants in the same amount as the German claim.
Wintershall Dea was the largest oil and gas company in Europe, 72.7% owned by BASF and the remainder by LetterOne, which is linked to Alfa Group shareholders. The German company had stakes in three joint ventures with Gazprom in Yamal. In addition, the company was one of the investors in Nord Stream-2 with a 15.5% stake in the project.
When Wintershall Dea announced its withdrawal from Russia in January 2023, its losses were estimated at €5.3bn. The Russian authorities imposed price caps on gas above which Gazprom was prohibited from buying from companies it jointly owned with Wintershall.
In December 2023, a Russian presidential decree transferred the rights and obligations of the joint ventures to companies established by the Russian government. Gazprom received stakes in those companies in proportion to its shares in the joint ventures, while stakes proportional to the foreign companies' ownership interest were transferred to the newly established LLCs. These, in turn, were acquired by SOGAZ and Gazovye Tekhnologii. The sale proceeds were transferred to special C-type accounts in the name of the previous foreign owners of the stakes.
Wintershall Dea claimed that the assets had been expropriated and launched two arbitration proceedings against the Russian Federation as the defendant. The company invoked the Energy Charter and the mutual investment protection treaty between Russia and Germany.
"According to the supervisory authorities, the proceedings abroad are illegal, in terms of both venue and the parties involved, have been deliberately set up against the defendant and are altogether biased," Kommersant writes. According to the Prosecutor General's Office, by leaving the Russian market, the corporation unilaterally violated the contracts it had signed.
Wintershall Dea effectively ceased to exist as an operating company in September 2024, with its main oil and gas assets bought out by UK-based Harbour Energy.