New at Leuphana: Prof. Dr. Till Patrik Holterhus, MLE., LL.M. (Yale)

Professor Holterhus, the hearing in the Bundestag raised the question of the legal framework for the expropriation of Russian energy infrastructure in Germany. The word expropriation makes many people sit up and take notice. What is the legal background?

The background is the Russian war of aggression in Ukraine. Although the Federal Republic of Germany is not a party to the war, it is supporting Ukraine in its defence against the Russian aggressor, which is permissible under international law. The Russian Federation has recently responded to this support by attempting to destabilise German energy supplies. In doing so, Russia has exploited the fact that some parts of Germany's energy infrastructure are legally under Russian control. For example, contrary to all market logic, the gas storage facility of the Russian company Gazprom in Rehden was not sufficiently filled for the last winter, and attempts were made to disrupt the functioning of the refinery in Schwedt, controlled by the Russian company Rosneft, which is responsible for a substantial part of the heating oil and fuel supply in eastern Germany. In this way, the Russian energy infrastructure was literally "weaponised" in order to disrupt German energy supplies, cause unrest among the German population, and ultimately “punish” Germany for its support of Ukraine.

The German Bundestag responded with a series of amendments to the German Energy Security Act, including the option of expropriating foreign-controlled critical energy infrastructure if absolutely necessary to maintain a stable energy supply. However, expropriation is fundamentally problematic from a rule of law perspective - property is comprehensively protected under German law. The Bundestag hearing therefore focused on the question: How should the expropriation provisions in the Energy Security Act be designed to secure the energy supply on the one hand, while remaining on the legally safe side on the other?

What was your advice to the committee?

I pointed out to the committee that the problems are certainly also, but not exclusively, at the level of German constitutional law. It is important to note that the whole question of the legality of such expropriations is also raised against the background of the international legal obligations of the Federal Republic of Germany. Therefore, not only German constitutional law is relevant, but also the law of the European Union and international law. Property is e.g. protected in the European Charter of Fundamental Rights and in the international investment treaties, such as the German-Russian Investment Protection Treaty of 1989 or the European Convention on Human Rights. This must always be taken into account and can result in a German obligation to protect foreign property that the German constitution itself does not even recognise.

How is Germany currently defending itself against this Russian instrumentalization of energy infrastructure?

In concrete terms, the Federal Republic of Germany has recently placed two German Rosneft subsidiaries, which together control the Schwedt refinery, under the trusteeship of the Federal Network Agency. Gazprom Germania, and with it the gas storage facility in Rehden, has even been completely expropriated. Under trusteeship, the state merely administers the shares in the company concerned; under expropriation, the state withdraws them completely. Both measures were taken on the basis of the German Energy Security Act and differ in the intensity of the intervention, but in the end they worked well. After all, they prevented an energy supply emergency.

Does Germany have to compensate the Russian companies for these takeovers?

In principle, intensive interventions in property are an irritation within legal orders that obey the rule of law. At the same time, however, property - at least according to the German Basic Law - always has a social obligation. Article 14 (2) of the German Basic Law simply states: "Property entails obligations. Its use shall also serve the public good.". Therefore, the question that usually arises when property is affected is rather not: is it allowed at all? The question is always: How will it be compensated? However, the case of the recent interference with the property of Gazprom and Rosneft is special. The particular legal question is: How should or must companies be compensated for interferences with their property if these companies have previously used the affected property to deliberately harm the Federal Republic of Germany? According to my interpretation of the applicable constitutional, European and international law, there can be no claim for compensation in such cases. The question is quite complex, and it would be too much to try to explain it here, but suffice it to say that if a robber holds someone at gunpoint with a view to robbing them, and police seize that gun to avert any further danger, that robber rightly has no claim to compensation. Ultimately, it cannot be any different when a foreign state uses its control over energy infrastructure located in Germany to deliberately endanger the German energy supply.

Thank you very much for the interview!

Till Patrik Holterhus studied law and European legal integration in Göttingen and at Yale Law School (USA). From 2015 to 2023, he was assistant professor at the Institute for International and European Law at Georg-August University Göttingen. After a position as acting professor at Humboldt University Berlin, Till Patrik Holterhus was appointed full professor at Leuphana University Lüneburg (Leuphana Law School) in April 2023. He holds the Professorship of Public Law, with a particular focus on constitutional and administrative law.