Nord Stream insurers refused to compensate for damage due to the conflict in Ukraine
Insurance companies Lloyd's of London and Arch Insurance refused to pay compensation to Nord Stream AG, the operator of the Nord Stream gas pipeline, which was blown up in September 2022. They explain this by saying that the pipe was damaged as a result of military operations, and such payments are not specified in the conditions. In addition, the defendants do not agree with the amount of the insurance limit in the amount of 400 million euros.
An extract from a document submitted to the High Court in London states that insurance does not cover damage “directly or indirectly caused by, resulting from or as a consequence” of war and hostilities, or the detonation of an explosive. Also, payments are not due if the attack on the gas pipeline was carried out using any military weapon or as a result of malicious actions or actions for political reasons.
It follows from the defendant’s position that the damage from the explosion is related to the conflict between Russia and Ukraine. This, in his opinion, corresponds to the terms “war”, “invasion”, “military actions”, which are contained in the list of risks and are not covered by the treaty. Insurers admit that the damage from the explosion could have been caused by or on the orders of a government.
The parties dispute the amount of insurance payments
In March 2024, Nord Stream AG filed a claim for 400 million euros against Lloyd's of London and Arch Insurance. The operator estimates the cost of restoring the gas pipeline at 1.2-1.35 billion euros. These funds will be used to remove pipes from the water, stabilize them, repair them, and then replenish lost gas reserves.
The claim is one of the largest filed in the UK High Court in the last year, according to court data analysis group Solomonic.
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Insurers do not agree on the amount of the insurance limit. They believe that the maximum amount of compensation is limited to 200 million euros, that is, half the amount requested by Nord Stream AG.
As follows from the position of the insurance companies, in July 2020 the parties set a limit on payments of 100 million euros for each insured event, but not more than 200 million per year for each line. The route consisted of two lines, and both were destroyed, but the defendants indicate that this is a single incident that occurred on the same day, in the same place and at approximately the same time.
Russia believes that refusal to compensate for damage to Nord Stream will undermine trust in the West
The official representative of the Russian Foreign Ministry, Maria Zakharova, said that refusal to compensate Nord Stream AG for damages would undermine customer confidence in Western insurance companies.
Not only are Westerners stealing state assets, private property, threatening to destroy the largest civilian infrastructure facilities, realized through investments, and then magically blown up, but now they’ve also gotten to insurance
In this regard, she asked the question: “Who will trust Western insurance companies now?”
Explosions at two Russian gas pipelines, Nord Stream and Nord Stream 2, occurred on September 26, 2022. They led to large-scale gas leaks. Accidents were recorded in the territorial waters of Sweden and Denmark. Russian President Vladimir Putin accused the United States intelligence services of sabotage on the Nord Stream. The Permanent Representative of the Russian Federation to the UN Vasily Nebenzya promised that Moscow will not allow the issue of a terrorist attack on the pipeline to be put on hold.
Denmark, Sweden and Germany began investigating the explosions. To date, the first two countries have closed it; only Berlin continues to clarify the circumstances of the incident.
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