European justice agrees with Gazprom to appeal the EU rules affecting the Nord Stream gas pipeline

The Court of Justice of the European Union declared on Tuesday "partially admissible" the appeal filed by the Swiss subsidiary of Gazprom, Nord Stream 2 AG --responsible for the management of the gas pipeline that connects Russia with Germany through the Baltic Sea-- against the revision of the European directive that requires that the rules of the internal natural gas market be applied to gas connections originating in countries outside the EU and that affected this gas pipeline.

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Through this procedure, the Court of Justice of the EU annuls the order of the General Court of the EU that had declared "inadmissible" the appeal filed by the subsidiary of Gazprom and considers that the European court "incurred an error of law", since the modification of the Gas directive in the community market directly affected the "legal situation" of Nord Stream 2 AG.

The high European court has concluded that the General Court "erroneously declared" that the directive "did not affect Nord Stream 2" and therefore has annulled the order appealed by the Swiss subsidiary of Gazprom, which declared the appeal filed by the responsible company inadmissible of the gas pipeline.

The court based in Luxembourg has ruled that among the existing interconnectors and those that remain to be built, the Nord Stream 2 gas pipeline is the only one to which “none of the exceptions of the modification of the European directive of the gas and, therefore, being directly affected by the rule "its appeal for annulment must be declared admissible". Moreover, it is the General Court that must rule on it.

In its opinion, the CJEU has appreciated that the lack of transposition of a directive by the Member States cannot create "obligations for an individual" nor "produce legal effects" on the company, for which it considers that the General Court "failed to comply its obligation to assess the existence of such effects.

The case dates back to 2019, when the European legislator modified the Gas Directive to ensure that the rules that apply to the transport of gas in the community market also apply to the transport of gas to or from non-EU countries. .

Whereupon, Nord Stream 2 AG, the Swiss subsidiary of the Russian state gas company, Gazprom, which is entrusted with the planning, construction and operation of the Nord Stream 2 gas pipeline, which connects Russia and Germany through the Baltic Sea, filed an appeal against the amendment of the directive before the General Court.

The appeal that was dismissed by the General Court in May 2020 and consequently was appealed by Nord Stream 2 AG before the Court of Justice of the EU.

The European court has indicated that Member States have a certain margin in the application of certain provisions of the gas directive, however, this margin does not apply when “granting exemptions” to Nord Stream 2 AG, since “ does not qualify."

Therefore, the CJEU has considered that the General Court "also made an error of law" in considering that the modification of the Gas directive left a certain margin with respect to the obligations of Nord Stream 2 in the hands of the Member States.

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