Russia's Rosneft requests end of trusteeship

The Federal Administrative Court in Leipzig has been dealing with the federal government's access to two German subsidiaries of the Russian oil company Rosneft since Wednesday. At the hearing, Rosneft's lawyers requested that the trust administration of the subsidiaries Rosneft Germany and RN Refining, which had been ordered in September, be lifted

The proceedings could also affect consumers in Germany: If the court upholds Rosneft's lawsuit, the state-run group in Moscow would regain influence over the important PCK refinery in Schwedt, Brandenburg, and thus over the oil market in Germany. It was initially unclear whether a verdict would be reached on Wednesday.

The background to the proceedings is the Russian war of aggression against Ukraine. As part of the sanctions against Russia, the federal government has decided to stop using Russian crude oil from 2023. The German Rosneft subsidiaries hold the majority in the PCK refinery, which in 2022 mainly processed Russian oil from the Druzhba pipeline. According to Federal Minister of Economics Robert Habeck (Greens), they had no interest in moving away from it.

In September, in the course of the Russian war of aggression against Ukraine, the Federal Ministry of Economics had the RN Refining

According to the Ministry of Economic Affairs, the operation of the Rosneft systems was at risk because other companies such as suppliers or IT service providers had stopped working with the Russian group or announced that they would do so, citing sanctions. In addition, there were indications that the Russian side could withdraw “massive” capital from the German companies.

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.