The insurers of the Nord Stream pipelines don’t have to pay €580 million (US$662 million) after a judge ruled that the sabotage of the pipes bringing Russian gas into Europe was the consequence of the war in Ukraine.

Nord Stream AG, the Swiss company that owned the structure, sued its insurers in London following an explosion that ruptured three pipelines and dented another in September 2022. Lawyers for Lloyd’s Insurance Company SA and Arch Insurance (EU) DAC argued that the damage was part of the war or carried out under orders of a government, and therefore exempt under the wording of the insurance policies.

“The damage to the pipelines (both the ruptures and the dent) was ‘directly or indirectly occasioned by, happening through, or in consequence of war,'” Judge Clare Moulder said in her ruling on Monday, handing a victory to the insurers. “Such damage was excluded from cover by the terms of Exclusion 2.i of the policies.”

The blasts have been the subject of a criminal investigation in Germany, which concluded the most plausible explanation was that the sabotage was caused by a group of Ukrainian divers. The London court heard from experts including a former US Navy Special Operations Officer and an explosives consultant.

Nord Stream is ultimately owned by Russian state-backed energy firm Gazprom PJSC. Nord Stream 1 entered service in 2011, pumping gas from Vyborg, Russia to Lubmin in Germany through pipes running through the Baltic Sea. Nord Stream 2 was completed in 2021, but never entered service as tensions over Russia’s threats to Ukraine ramped up prior to the full-scale invasion in 2022.

While the identity of the perpetrators of the attack was a key point of discussion at trial, the judge made no findings on this issue. Ukraine was considered a likely potential perpetrator by both sides, but the possibility that the sabotage was carried out by Russia and the US were also discussed by experts in evidence.

“It is unnecessary in order to determine whether the war exclusion applies which was the ‘more likely’ perpetrator of the sabotage,” Moulder said in her judgment. “I find that if any of the possible perpetrators carried out the sabotage, the war would have been a ‘significant’ cause of their actions.”

Read the article online at: https://www.worldpipelines.com/business-news/09072026/insurers-avoid-580-million-hit-from-nord-stream-pipeline-blasts/