A judge has thrown out a $662 million insurance claim by the operator of the Nord Stream pipeline for damage that left the key gas supply line inoperable.
The Nord Stream 1 supplies Russian gas to Germany at the bottom of the Baltic Sea, while Nord Stream 2 was completed in 2021 but has yet to entered service.
Both were blown up in September 2022, seven months after Russia's full invasion of Ukraine.
A Ukrainian man arrested in Italy and held in detention in Germany has been charged with the attack on the pipeline.
The operator of Nord Stream 1, Nord Stream AG, sought $662 million from Lloyd's Insurance Company and Arch Insurance for the damage wrought.
But they refused, arguing that exemption applied due to war and government acts. Nord Stream 2 is insured separately.
Nord Stream AG, a Swiss-based international consortium of five major companies including Russia’s Gazprom, then brought the case to the High Court in London.
A key part of the argument over insurance centred on substantial damage identified on Line 2 of the pipeline. This was close to the rupture of Line 1, which was known to have been caused by explosives.
The insurers' case was that the dent was also caused by explosions in the course of the same attack.
But Nord Stream AG called on experts to give evidence the damage had been caused by a ship’s dropped anchor.
A five-day trial heard from Hefin Jones, who described himself as having a 26-year career in UK special forces, during which he was involved in “demolitions of key national infrastructure” and “combat diving operations in high-threat maritime environments”.
Mr Jones told the court that if a ship had accidentally dropped or dragged an anchor with sufficient force to strike and damage a major undersea gas pipeline “such an occurrence would ordinarily constitute a reportable maritime incident”.
“I am not aware of any evidence of such a report having been made,” he added.
Andrew Pettitt, an engineering explosives consultant, said the site of the dent was consistent with an explanation that an explosive charge was dislodged, or fell to the seabed and subsequently detonated.
The trial heard from geopolitical experts, who agreed that there were only four possible perpetrators of the attack – Ukrainian state actors, Ukrainian sub-state actors, US state actors and Russian state actors.
Nord Stream AG argued the damage to the pipeline did not further either of the warring party’s aims, the sabotage had its roots in Ukraine’s much longer-term struggle for independence and the pipelines did not constitute military targets.
Giving evidence for Nord Stream AG, Timothy Less, a former diplomat who is now senior adviser for geopolitics at the Judge Business School at the University of Cambridge, said the attacks were part of a cycle of conflict dating back decades.
The pipelines were a non-military target in international waters, well outside the “theatre of war”, he told the court.
Giving her decision, Judge Dame Clare Moulder said that for whoever had carried out the sabotage, the war in Ukraine would have been a “significant” cause of their actions. The damage was “directly or indirectly occasioned by, happening through, or in consequence of war”.
She concluded it was “extremely unlikely” the dent in the pipeline had been caused by a dropped anchor.
