Yahoo Finance Russian oil giant Rosneft sues German government after it seizes assets
Russian oil giant Rosneft has sued the German government for seizing its assets in response to the war in Ukraine.
In a bid to “safeguard Germany’s energy supply”, Chancellor Olaf Scholz’s administration took control of three oil refineries owned by Rosneft last month.
Berlin argued that the assets could otherwise be used as leverage by the Kremlin to put pressure on the country, which is already scrambling to bolster oil and gas supplies after years of dependence on Russia.
On Friday, Rosneft launched legal proceedings against the move, arguing that the refineries had been seized illegally.
The claim says Berlin failed to meet the requirements necessary under Germany’s Energy Security Act because Rosneft had honoured its supply obligations in full.
Rosneft also claims new regulations introduced by the federal government over the summer were unconstitutional.
Malmendier Legal, the German law firm hired to represent the Russian company, said: “Rosneft has always fulfilled its commitment in Germany and the existing contracts in good commercial practice and without political influence, despite the conflict in Ukraine to this day.
“Compulsory administration combined with the power to sell the shares in Rosneft's German subsidiaries to third parties, and to do so without compensation, is simply too much of a good thing in constitutional terms.”
Under German law, the government can take over the running of an energy company on energy security grounds.
For example, Berlin also put a unit of Gazprom, the Kremlin-owned gas company, into trusteeship. The division controls several of the country’s major gas storage facilities.
The German Government put three Rosneft units that own stakes in refineries in Schwedt, Karlsruhe and Vohburg into trustreeships last month.
Together, they account for about 12pc of the country’s oil processing capacity.
At the time the refineries were seized, Chancellor Scholz said he was prepared for the risk of retaliation from Mr Putin over the seizing of the oil refineries.
Germany has filled its oil stores in Schwedt and Leuna, while the country has also held talks with Poland about replacing Russian oil supplies.
However, Malmendier said Rosneft’s Schwedt and Leuna refinery sites “depended” on oil deliveries by Rosneft and that the company was “willing to organise” these itself.
“A trusteeship is not a suitable means of ensuring this better than Rosneft, nor is it necessary in view of the existing reliability of supplies,” the statement said.
On Friday the German economy ministry said that it had taken note of a lawsuit but had not yet received any documents related to it.
However, the ministry insisted that the conditions for Germany imposing trusteeship over the company were met under the Energy Security Act.
“The reason for this is the endangerment of energy supply operation and an impending impairment of the security of supply,” the spokesman added.
The court battle comes as the EU prepares to ban imports of oil from Russia by the end of the year, with Germany setting out measures to make sure the refineries can receive oil from other routes.
