Nord Stream Initiates Legal Action Against Insurers Including Lloyd’s of London for Over €400m in Damages Following Pipeline Explosions
The Swiss operator of the Nord Stream pipelines, spanning the Baltic Sea, has pursued legal proceedings at the High Court for compensations linked to the 2022 pipeline blasts.
These explosions in Ukraine reignited tensions among Russia, Western nations, and Ukraine, with mutual accusations over the incident’s culpability.
Danish authorities recently concluded an inquiry into the suspected “sabotage” of the pipelines, citing insufficient evidence for criminal charges. While Germany’s investigation remains open, Sweden has concluded theirs.
Both Russia and Ukraine have denied any involvement in the pipeline explosion.
Gazprom, a Russian government-controlled entity, partly owns Nord Stream, alongside Western energy conglomerates such as Engie, Gasunie, and E.On.
In the lawsuit filed by Nord Stream, Lloyd’s Insurance Company, a European branch of Lloyd’s of London, and the Bermuda-based reinsurer Arch Insurance are listed as defendants.
Lloyd’s serves as a nominal defendant, and Arch as a nominal plaintiff, implying potential liabilities for several other insurers under Nord Stream’s policy in case of damage awards.
A Nord Stream representative confirmed the filing of a legal dispute in the Commercial Courts of London between Nord Stream AG and its insurers but refrained from commenting further on the proceedings.
According to a report initially disclosed by Financial Times, Nord Stream’s legal claim estimates the cost for pipeline repairs and gas inventory replenishment at nearly €1.35bn, seeking to reclaim €400m through insurance claims.
Post-explosion, one segment of the pipeline appeared severely distorted, while another seemed cleanly severed.
The pipeline was secured through both primary and secondary insurance coverage, implying initial damage payments by primary insurers before secondary coverage activation.
Reports suggest Nord Stream’s assertion that the explosions should prompt both primary and secondary insurance compensation. Responses from Lloyd’s and Arch to the claim are pending.
Lloyd’s, adhering to policy, refrained from commenting on the litigation or specific policies and clients.
Arch Insurance has also chosen not to comment on the matter.
