Since Wednesday, the Federal Administrative Court has been reviewing the federal government’s decision to take control of two German subsidiaries of the Russian energy group Rosneft. The group considers the trust administration of its subsidiaries Rosneft Germany and RN Refining & Marketing, which was ordered in September, to be illegal. The oral hearing began in Leipzig in the morning.
During the hearing, the presiding judge, Ulla Held-Daab, indicated that she saw the encroachment on property rights as having a major impact: “We’re already seeing an encroachment of clear intensity,” she said. On the other hand, security of energy supply is “a particularly important common good” and of paramount importance. That has to be considered.
At the beginning of the hearing, there were procedural issues. This included whether the Russian Rosneft parent company in Moscow and a subsidiary in Luxembourg were even allowed to appear as plaintiffs. Another point of contention was whether the plaintiffs should have been formally heard before the trustee order was issued.
Federal lawyers argued that in the summer of 2022 there was a need to hurry. The Russian parent company could have systematically withdrawn assets and forced its subsidiaries into bankruptcy. An informant gave evidence of this, said lawyer Ulrich Karpenstein, legal representative of the federal government.
The plaintiff representatives around the lawyer Bertrand Malmendier did not accept that. In his words, Rosneft Germany had an “extremely good year” in 2022 and “cash in hand of more than one billion euros”. Even if amounts had been deducted – which was not the case – this would not have been sufficient to drive the German subsidiaries into insolvency.
The background is the German renunciation of Russian crude oil after Russia’s attack on Ukraine. Rosneft is largely owned by the Russian state. The subsidiaries are majority owners of the important PCK refinery in Schwedt, Brandenburg. They imported Russian oil via the Druzhba pipeline and, according to the federal government, had no interest in moving away from it. They also hold shares in other refineries in Germany. The federal government justified the trust solution with dangers for the security of supply and for the supply of the PCK refinery. The Federal Administrative Court is the first and last instance in the proceedings. (dpa)
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