A London High Court judge has ruled against Nord Stream in a €580 million insurance dispute stemming from the 2022 sabotage of two major Russian gas pipelines supplying Europe. The court determined that the insurers, led by Lloyd’s of London, are not liable for damages due to a war exclusion clause within their policies.
The pipelines, known as Nord Stream 1 and Nord Stream 2, were severely damaged by explosions in the Baltic Sea near Denmark in September 2022. The blasts destroyed three of the four pipeline strings, significantly disrupting gas transit infrastructure. Nord Stream 1 was majority-owned by Gazprom, Russia’s state-backed energy company, while the remainder was held by German energy firms. Nord Stream 2, intended to enhance Russian gas exports to Europe, was completed but never activated, having been blocked by Germany amid rising tensions prior to Russia’s invasion of Ukraine.
During the court proceedings, Russia, Ukraine, and the United States emerged as potential actors responsible for the attacks, though the judge, Dame Clare Moulder, did not conclusively attribute blame to any party. Nonetheless, she ruled that the war between Russia and Ukraine constituted a “significant” causal factor, triggering the application of the war exclusion clause in the insurance contracts and shielding the insurers from liability.
The insurers, including Lloyd’s and Arch, had argued that the explosions either arose directly from the war or were state-directed acts, both scenarios exempting them from coverage. In contrast, Nord Stream’s legal team contended that while the war provided context, it was not the direct cause of the blasts, suggesting that non-state saboteurs may have been responsible. However, the judge found this distinction immaterial, stating that any such sabotage would have been motivated by the ongoing conflict.
The ruling represents a major legal victory for the insurance consortium, which now avoids what would have been one of the largest-ever insurance payouts for infrastructure damage. Gazprom had already ceased gas flows via Nord Stream 1 prior to the explosions as part of measures that contributed to a significant energy crisis across Europe, an event estimated to have caused economic losses exceeding €1 trillion.
No government has publicly claimed responsibility for the pipeline attacks. Investigations led to the arrest of two Ukrainian nationals—one in Italy and another in Poland—after explosives were detected on a yacht allegedly used in the operation. The Italian suspect was extradited to Germany, where he recently faced charges including causing an explosion, destruction of property, war crimes complicity, and disruption of public services. Polish authorities declined to extradite the other suspect.
Representatives for Lloyd’s, Arch, and Nord Stream declined to comment on the outcome. The case underscores the complex intersection of geopolitical conflict, international law, and the insurance industry in the aftermath of critical infrastructure sabotage.