The fiduciary administration was one in a series of similar measures adopted by the German Government in the midst of last year’s energy crisis. As a result of BNetzA’s appointment as fiduciary, even though Rosneft remained the legal owner of the shares in the relevant German companies, it lost its voting rights in these shares and thereby lost the control over the companies’ management as well as access to its resources and potential profits. After several hearings and witness statements, the court rejected Rosneft’s appeal. The decision is final.
The two Rosneft subsidiaries (Rosneft Deutschland GmbH and RN Refining & Marketing GmbH) are active in the import and processing of Russian crude oil. They combine a significant share in the overall crude oil processing capacity in Germany, which is said to amount to approximately 12 percent. In particular, the German subsidiaries control the PCK refinery in Schwedt/Oder, which ensures the basic supply of mineral oil products to Northeast Germany and also supplies the Berlin airport. The PCK refinery was heavily dependent on crude oil supplies from Russia via the Druzhba pipeline.
In March 2022, Rosneft Deutschland GmbH asked the German Federal Ministry of Economics and Climate Protection (Bundesministerium für Wirtschaft und Klimaschutz – BMWK) for support because business partners were refusing to cooperate with the Rosneft subsidiary. In some cases, the business partners apparently went beyond the sanctions declared at EU level (so-called over-compliance). This concerned in particular cooperation with banks and insurance companies, which had the potential to cause serious financial distress.
In response, BMWK issued a Letter of Comfort confirming that Rosneft’s German subsidiaries did not fall under the EU sanctions regulations and emphasized their importance for the security of German oil supply. BMWK did not respond to a later request for an additional Letter of Comfort, but considered ordering a fiduciary administration instead. A short time later, reports surfaced that attempts were being made to withdraw capital from the German subsidiaries.
The insolvency of the German Rosneft subsidiaries, or any substantial expectation to that end, would have had the potential for a cascade effect in the German energy market, causing a severe threat to the German energy supply.
In order to prevent any such risk, BMWK placed the Rosneft subsidiaries under BNetzA’s fiduciary administration in September 2022.
Under the order, BNetzA assumed control of the day-to-day management of Rosneft’s German subsidiaries, and it appointed new (interim) management. While Rosneft Russia maintained legal ownership of the shares in the two German companies, it lost its voting rights from these shares and thus was unable to influence operations or access to the companies’ profits.
The BVerwG had to deal with the question of whether the German Government was entitled to place the two Rosneft subsidiaries under BNetzA’s fiduciary administration.
On 13 October 2022, Rosneft filed an appeal with the BVerwG challenging the legality of the German Government’s fiduciary administration order.
The proceedings before BVerwG were highly controversial because the national security interest in sufficient crude oil supplies conflicted with the civil and constitutionally protected ownership rights of a private company. It took the BVerwG four hearings and a comprehensive evidence collection with several witness statements to come to a decision.