THE SHELL LEAKS FILES — 20 OCTOBER 2026
SLF-2007-093
The Sakhalin Papers LXXXIII: The Energy Charter Treaty Trap — How a Gazprom-Owned Company Challenged the EU, and Where Shell Fits In
A 2019 arbitration notice, a 192-page investment claim, the European Union’s jurisdictional objections and an extraordinary legal complication: Brussels has now withdrawn from the very treaty under which the case was brought.
Archive reference: SLF-2007-093
Publication date: 20 October 2026
Collection: The Sakhalin Papers — Shell, Gazprom and Russia
Previous instalment: The Sakhalin Papers LXXXII, 19 October 2026
Principal sources: Shell corporate announcements and financial reports; Nord Stream 2 AG’s arbitration notice and memorial; the European Union’s September 2020 jurisdictional memorial; Permanent Court of Arbitration Procedural Order No. 4; EU judicial records; and contemporaneous Reuters reporting.
Evidence classification: Authenticated primary documents; recorded legal allegations and responses; judicial findings; and separately identified editorial commentary.
INTRODUCTION: THE TREATY THAT OUTLIVED THE INVESTMENT
There is a revealing passage in a legal document dated 26 September 2019.
The document was submitted on behalf of Nord Stream 2 AG, the Swiss-registered company responsible for constructing the controversial pipeline from Russia to Germany.
It was addressed to the European Union.
Its purpose was to commence international arbitration.
The company alleged that changes to European gas-market legislation had unlawfully damaged its investment.
It sought orders protecting its ability to operate the pipeline under the commercial arrangements originally envisaged.
And it reserved the right to seek financial compensation.
The document appeared three years before Shell wrote off its entire $1.126 billion Nord Stream 2 loan.
It also preceded Russia’s full-scale invasion of Ukraine, Germany’s suspension of the pipeline’s certification process and the explosions that damaged sections of the Nord Stream infrastructure in September 2022.
The legal dispute was therefore not originally about the war.
It was about something more fundamental: whether an international investment treaty could be used to challenge the consequences of European legislation governing energy infrastructure.
Seven years later, the arbitration remains unresolved.
The previous instalment examined how European sanctions created uncertainty about whether the arbitration itself could proceed.
Today, we return to the beginning of the dispute and examine the underlying documents.
They reveal a disagreement extending beyond the commercial fate of a pipeline.
At issue are the rights of foreign investors, the regulatory powers of governments, and the circumstances in which changes to legislation can create international compensation obligations.
There is also a striking subsequent development.
The European Union withdrew from the Energy Charter Treaty on 28 June 2025.
Yet that withdrawal did not simply erase the legal history of investments made while the treaty was in force.
The treaty contains a provision designed to preserve certain investment protections for another twenty years.
The potential implications are considerable.
For Shell shareholders, the documents provide an opportunity to examine the legal environment surrounding a financing decision that eventually resulted in a substantial write-down.
1. THE DOCUMENT THAT IDENTIFIES SHELL
We begin with an important primary source.
Nord Stream 2 AG’s original Notice of Arbitration, dated 26 September 2019, is publicly available through the United Nations Commission on International Trade Law’s transparency registry.
Page 3 of the numbered notice, corresponding to page 5 of the PDF, identifies the financing arrangements concluded in 2017.
Among the companies named is:
Shell Exploration and Production (LXXI) B.V.
This is significant because it is not simply a retrospective description of Shell’s involvement.
It is the name of a Shell entity appearing in a contemporaneous legal document submitted by the pipeline company itself.
The notice records that financing agreements were concluded with Gazprom and five European energy companies, including Shell.
It also identifies the pipeline company’s gas transportation agreement with Gazprom Export LLC, concluded on 7 March 2017.
These arrangements formed part of the commercial structure through which the project was intended to operate.
The existence of Shell’s financing commitment is independently confirmed by Shell’s own announcement of 24 April 2017.
That announcement identified ENGIE, OMV, Uniper and Wintershall alongside Shell.
Each company committed financing and guarantees covering up to 10% of the project’s estimated €9.5 billion cost.
Gazprom remained the sole shareholder of Nord Stream 2 AG.
Thus, Shell was a financier rather than an equity shareholder in the pipeline company.
This distinction is important.
The claimant in the subsequent arbitration was Nord Stream 2 AG.
Shell was not the claimant.
Nevertheless, Shell’s involvement was expressly recorded in the investment documentation underlying the dispute.
The original arbitration notice therefore provides a useful independent cross-reference to Shell’s corporate announcement. UNCITRAL
Primary documents: Nord Stream 2 AG — Notice of Arbitration, 26 September 2019 and Shell’s authenticated April 2017 financing announcement, page 40.
2. APRIL 2019: THE DISPUTE BEGINS BEFORE THE DIRECTIVE TAKES EFFECT
On 12 April 2019, Nord Stream 2 AG initiated the formal process of seeking an amicable settlement under the Energy Charter Treaty.
The date matters.
The disputed European legislation had not yet formally been adopted.
Directive (EU) 2019/692 was adopted on 17 April 2019 and entered into force on 23 May 2019.
The directive extended important EU internal gas-market requirements to transmission pipelines connecting EU Member States with third countries.
Those requirements included the separation of gas transmission from production and supply activities, third-party access provisions and tariff regulation.
Nord Stream 2 AG maintained that the new rules would seriously interfere with the project’s commercial arrangements.
The company argued that the investment had been undertaken in reliance upon a different regulatory framework.
It also contended that the legislative changes unfairly targeted Nord Stream 2.
These were allegations advanced by the pipeline company, not established findings of unlawful discrimination.
Contemporaneous reporting confirms that the dispute was already attracting attention.
On 25 April 2019, Reuters reported that Nord Stream 2 had warned the European Commission of potential legal proceedings.
The report described a letter seeking assurances that the project would be exempted from the new requirements.
The Commission’s response was uncompromising.
Its position was that the legislation had been approved through the European Union’s established procedures and would apply.
The Reuters report also identified Shell among the project’s European financial backers.
This reporting is valuable because it establishes how the dispute was understood at the time, before the subsequent invasion of Ukraine transformed its political significance. Yahoo Finance
Contemporaneous source: Reuters, 25 April 2019 — EU Says New Energy Rules Apply to Nord Stream 2.
3. SEPTEMBER 2019: THE PIPELINE COMPANY INVOKES AN INTERNATIONAL TREATY
On 26 September 2019, Nord Stream 2 AG formally commenced arbitration against the European Union.
The legal basis was Article 26 of the Energy Charter Treaty.
The proceedings were brought under the 1976 UNCITRAL Arbitration Rules.
The Permanent Court of Arbitration subsequently administered the case under reference PCA 2020-07.
The claimant was a company incorporated in Switzerland.
The respondent was the European Union itself.
This was an important distinction from disputes brought solely against individual European governments.
Nord Stream 2 AG relied upon Switzerland’s status as a contracting party to the Energy Charter Treaty.
It claimed to be a qualifying foreign investor with qualifying investments situated within the European Union.
Those investments included pipeline infrastructure, German landfall facilities, construction contracts and regulatory permits.
The company therefore argued that it was entitled to invoke treaty protections against conduct attributable to the European Union.
The original arbitration notice alleged breaches involving discriminatory treatment, interference with investment rights and violations of obligations to provide fair and equitable treatment.
It referred particularly to Articles 10 and 13 of the treaty.
Article 10 contains obligations concerning the treatment and protection of qualifying investments.
Article 13 addresses expropriation and measures having an equivalent effect.
But there was an important procedural question.
Had the European Union actually consented to international arbitration of this particular dispute?
That question became central to the litigation.
4. JULY 2020: THE 192-PAGE MEMORIAL REVEALS WHAT THE CLAIMANT WANTED
On 3 July 2020, Nord Stream 2 AG submitted its principal memorial.
The document runs to 192 PDF pages.
It provides a detailed reconstruction of the project’s commercial arrangements, the development of European gas legislation, the competing political interests and the alleged consequences for the investment.
The memorial was accompanied by witness statements, expert evidence and numerous documentary exhibits.
Its contents are important for understanding the claimant’s position.
Nord Stream 2 AG argued that the amended European legislation damaged the commercial structure upon which the pipeline had been financed.
In particular, it objected to the consequences of applying unbundling, third-party access and tariff regulation requirements.
The company’s case was that the pipeline had been developed around a long-term transportation agreement with Gazprom Export.
That arrangement was intended to generate a predictable revenue stream.
The new European requirements, it argued, threatened to interfere with this structure.
The company also alleged that the legislation had been deliberately designed to disadvantage Nord Stream 2.
Again, this was the claimant’s allegation.
The memorial did not itself establish that EU institutions had acted unlawfully.
Nevertheless, the submission provides a detailed record of what the pipeline company believed had gone wrong.
It also reveals an aspect of the claim that is easily overlooked.
Nord Stream 2 AG was not initially seeking only a financial damages award.
Its principal requested remedy was regulatory.
The company wanted the tribunal to order the European Union, by means of its own choosing, to remove the application of specified gas-market obligations to Nord Stream 2.
In paragraph 527 of the memorial, the company identified particular provisions of the Gas Directive.
These included Articles 9, 10 and 11, together with specified provisions of Articles 32 and 41.
In the alternative, it sought compensation in an amount to be assessed.
This distinction matters.
The primary objective was to preserve the commercial viability of the investment by obtaining relief from the regulatory consequences being challenged.
Compensation was an alternative.
The company was seeking to protect an operating business, not merely recover money from a project that had already failed.
Primary document: Nord Stream 2 AG — Claimant’s Memorial, 3 July 2020. See particularly the summary of claim and paragraphs 527–529. International Arbitration Database
5. THE EUROPEAN UNION’S FIRST DEFENCE: YOU HAVE ALREADY CHOSEN A COURT
On 15 September 2020, the European Union submitted its Memorial on Jurisdiction and Request for Bifurcation.
This authenticated document is particularly revealing.
Rather than immediately concentrating upon the underlying commercial allegations, the EU advanced two objections to the tribunal’s jurisdiction.
The first concerned a legal principle commonly known as a fork-in-the-road provision.
The expression describes treaty arrangements under which an investor may be required to choose between different dispute-resolution procedures.
Depending upon the precise treaty language, choosing one procedure can prevent the investor from subsequently pursuing the same dispute through another.
The European Union relied upon Article 26(3)(b)(i) and Annex ID of the Energy Charter Treaty.
It argued that its consent to international arbitration was conditional.
In particular, it maintained that an investor could not pursue the same dispute through arbitration after previously submitting it to the relevant courts or another applicable dispute-resolution procedure.
Nord Stream 2 AG had already challenged the 2019 directive before the EU General Court.
That action was filed on 25 July 2019.
The arbitration commenced two months later.
The European Union argued that the two proceedings concerned fundamentally the same dispute.
It also referred to litigation involving Germany’s energy regulator.
By September 2020, therefore, there were proceedings concerning Nord Stream 2 in several different legal forums.
The EU contended that this was precisely the situation the treaty’s restrictions were designed to prevent.
The company disagreed.
It maintained that its EU court challenge and international arbitration involved different legal rights and remedies.
The General Court action concerned the legality of the directive under European Union law.
The arbitration concerned alleged violations of international investment obligations.
Whether those distinctions were sufficient to defeat the EU’s objection was a matter for the arbitral tribunal.
Primary evidence: European Union — Memorial on Jurisdiction and Request for Bifurcation, 15 September 2020. See paragraphs 2–15. UNCITRAL
6. THE SECOND DEFENCE: WAS THE EUROPEAN UNION THE CORRECT RESPONDENT?
The European Union’s second objection concerned responsibility.
This was more technical but potentially just as important.
The disputed measure was an EU directive.
Directives generally require Member States to implement their requirements through national legal arrangements.
The EU argued that the practical effects alleged by Nord Stream 2 AG would arise from decisions taken by Member States, particularly Germany.
It maintained that national authorities retained discretion over the implementation of the relevant provisions.
Consequently, according to the EU, any alleged injury could not simply be attributed to the European Union.
In legal terminology, this was described as an objection concerning jurisdiction ratione personae.
The expression concerns whether the tribunal has jurisdiction in relation to the relevant parties.
The EU’s argument was that it was not internationally responsible for the alleged consequences of discretionary national implementation measures.
Nord Stream 2 AG disagreed.
Its position was that the European Union’s adoption of the amended directive was itself capable of violating the treaty.
The company argued that the regulatory changes and their consequences could not be separated in the manner proposed by the EU.
This dispute illustrates an important difficulty in international investment arbitration.
Where legislation is adopted at one level of government and implemented at another, determining responsibility can involve complicated questions of international law.
The tribunal would need to examine the legal obligations, the measures actually taken and the causal relationship between those measures and any proven injury.
The European Union’s jurisdictional objections were therefore substantial legal arguments.
But they were not, at that stage, judicial findings. UNCITRAL
7. DECEMBER 2020: THE TRIBUNAL REFUSES TO DECIDE JURISDICTION FIRST
The European Union wanted its jurisdictional objections decided before the tribunal examined the merits of Nord Stream 2 AG’s claims.
This procedure is known as bifurcation.
If a tribunal determines that it lacks jurisdiction, there may be no need to undertake a lengthy examination of the underlying allegations.
The EU therefore requested a separate preliminary phase.
Nord Stream 2 AG opposed that proposal.
It argued that the jurisdictional questions were closely connected with the substantive issues.
On 31 December 2020, the tribunal delivered Procedural Order No. 4.
The order is an authenticated primary document.
It records the arguments advanced by both parties and explains the tribunal’s reasoning.
The tribunal considered that the jurisdictional questions could not necessarily be resolved through a straightforward comparison of the different court proceedings.
It was concerned that an insufficiently detailed examination could lead to an incorrect application of the treaty’s restrictions.
The arbitrators also recognised that their eventual interpretation could have implications beyond Nord Stream 2.
Other international investment disputes involving the European Union might be affected.
The tribunal consequently rejected the European Union’s request for a separate preliminary jurisdictional phase.
It decided that the objections should be examined together with the merits.
But an important distinction must be emphasised.
This was not a determination that the European Union’s jurisdictional objections were wrong.
The tribunal expressly stated that it had reached no conclusion on their merits.
It had decided how the case should proceed, not whether Nord Stream 2 AG was entitled to succeed.
The tribunal also envisaged a separate damages phase, if necessary.
Thus, the immediate outcome was procedural.
The arbitration could continue to examine jurisdiction and liability together, leaving damages for possible later determination.
Primary document: Procedural Order No. 4 — Decision on Request for Preliminary Phase on Jurisdiction, 31 December 2020. See paragraphs 45–54. UNCITRAL
8. NOVEMBER 2024: A COURT REACHES AN UNFAVOURABLE CONCLUSION FOR NORD STREAM 2
The separate proceedings before the EU courts continued.
On 27 November 2024, the General Court delivered an important judgment.
It dismissed Nord Stream 2 AG’s action challenging Directive 2019/692.
The judgment is particularly relevant because it examined the company’s assertions concerning regulatory expectations and the foreseeability of legal changes.
The court concluded that Nord Stream 2 AG had continued investing during a period when there was no assurance that the existing regulatory position would remain unchanged.
It considered that the company could foresee the possibility of the EU extending its gas-market requirements to pipelines entering from third countries.
The court also concluded that the company’s exclusion from the derogation available to pipelines completed before May 2019 did not establish a violation of the relevant principles of EU law.
Its conclusions addressed legal certainty, legitimate expectations, equal treatment and proportionality.
The judgment was a substantive defeat for Nord Stream 2 AG.
It supported the legality of the legislation under the EU legal standards considered by the court.
However, the ruling did not itself determine the separate Energy Charter Treaty arbitration.
The legal foundations of the two proceedings were different.
The distinction remains significant even where the underlying facts overlap.
The court’s findings may be relevant to the arguments and evidence considered by an investment tribunal.
They are not automatically a final answer to every question arising under international investment law.
There is another important qualification.
The 2024 judgment examined the regulatory situation surrounding the 2019 directive.
It did not establish that Nord Stream 2 was commercially viable under the entirely different geopolitical circumstances prevailing after Russia’s invasion of Ukraine.
Those later developments created additional and distinct obstacles.
Official judicial source: Court of Justice of the European Union — Press Release 195/24, 27 November 2024. Jus Mundi
9. JUNE 2025: THE EUROPEAN UNION WITHDRAWS FROM THE TREATY
The next development gives this historical dispute an additional dimension.
On 28 June 2025, the European Union’s withdrawal from the Energy Charter Treaty became effective.
The European Commission confirms the date on its official Energy Charter information page.
The withdrawal followed increasing concern that the treaty’s investment-protection arrangements were inconsistent with European and international climate-policy objectives.
Critics had argued that treaty protections could expose governments to compensation claims when they introduced measures intended to reduce fossil-fuel dependence.
Defenders of investment treaties emphasised the importance of legal certainty and protection against arbitrary or discriminatory government action.
The European Union ultimately concluded that withdrawal was appropriate.
But Article 47 of the Energy Charter Treaty contains a provision commonly described as a sunset clause.
Under Article 47(3), treaty protections continue to apply for twenty years to certain qualifying investments made before withdrawal took effect.
For the European Union, that period would extend to June 2045, subject to the applicable treaty conditions and any relevant legal disputes over interpretation.
The precise implications depend upon the investor, the respondent, the investment and the legal issues concerned.
A distinction is necessary between disputes involving investors from EU Member States and those involving investors from outside the Union.
Nord Stream 2 AG is incorporated in Switzerland.
Its position cannot automatically be equated with that of an investor incorporated within the European Union.
Furthermore, its arbitration commenced in September 2019, long before the EU’s withdrawal took effect.
The withdrawal therefore raises questions about the continuing application of treaty protections, but it does not establish that the original arbitration has been extinguished.
The proceedings remain listed as pending.
Official sources: European Commission — Energy Charter Treaty Withdrawal and Energy Charter Treaty — Article 47, Withdrawal and Continuing Investment Protection. PCA-CPA
10. THE COMPENSATION QUESTION: WHAT WOULD HAVE TO BE PROVED?
It is tempting to examine a €9.5 billion pipeline project and assume that any successful investment claim could automatically involve billions of euros in damages.
That assumption would be unjustified.
An international investment claim generally requires the claimant to establish several distinct elements.
The tribunal must have jurisdiction.
The claimant must demonstrate that the relevant treaty protections apply.
It must establish a breach of those protections.
If compensation is sought, it must also demonstrate legally recoverable loss and the necessary causal relationship between the breach and that loss.
Additional questions may concern valuation, mitigation and the appropriate form of relief.
The fact that an investment has lost commercial value does not automatically establish that a government must compensate its owner.
Likewise, the existence of regulatory changes does not automatically constitute expropriation or unfair treatment.
Governments possess legitimate regulatory powers.
The legal difficulty lies in determining when the exercise of those powers crosses the threshold established by the applicable treaty.
Nord Stream 2 AG’s July 2020 memorial requested compensation in an amount to be assessed only as an alternative to its principal regulatory remedy.
The official Energy Charter dispute record does not identify a final compensation award.
Nor has the public arbitration record examined for this instalment established a final damages figure.
The project cost, Shell’s loan impairment and any potential compensation entitlement must therefore remain separate categories.
There is a documented investment, a documented financial write-down and an unresolved legal claim. They are not interchangeable.
11. THE SHELL CONNECTION: FROM A FINANCING AGREEMENT TO A $1.126 BILLION WRITE-DOWN
For Shell shareholders, the documents offer a clear chronology.
On 24 April 2017, Shell announced its participation in financing Nord Stream 2.
By September 2019, Nord Stream 2 AG was pursuing international arbitration over European regulatory changes.
In July 2020, the claimant submitted a detailed memorial explaining why it considered the legislation damaging to its investment.
In December 2020, the tribunal rejected the EU’s request to determine jurisdiction separately.
In February 2022, Russia’s full-scale invasion of Ukraine fundamentally altered the project’s political and commercial environment.
Shell announced its intention to end its involvement in Nord Stream 2 and withdraw from Russian ventures.
In its 2022 Annual Report, Shell recorded that the loan had been fully written down in the first quarter of that year.
The amount was $1,126 million.
The report also confirmed that the final loan instalments had been made during the second quarter of 2020.
This provides a notable chronological detail.
Shell’s financing commitments were being completed while Nord Stream 2 AG’s dispute with the European Union was already underway.
That does not establish that Shell’s management failed to assess the regulatory risks.
Nor does it establish that the arbitration was regarded internally as financially material to Shell.
Those questions would require additional evidence concerning Shell’s internal investment assessments, contractual arrangements and management deliberations.
The publicly available documents establish the chronology, but not the confidential reasoning behind every decision.
Nevertheless, the chronology is relevant to shareholders examining how legal and geopolitical risks were managed.
There is also no basis in the material examined to conclude that Shell would automatically benefit from a successful award obtained by Nord Stream 2 AG.
Shell’s status as a financier must not be confused with ownership of the claimant company or entitlement to compensation awarded to that company.
The terms of the financing arrangements would be relevant to any separate question concerning possible recoveries.
Authenticated corporate source: Shell Annual Report and Accounts 2022 — Nord Stream 2 Disclosure, page 263. Shell Norway
12. DOCUMENTARY FINDINGS
Established Facts
Shell and four other European companies entered financing agreements with Nord Stream 2 AG in April 2017.
Gazprom was the pipeline company’s sole shareholder.
The September 2019 arbitration notice specifically identified Shell Exploration and Production (LXXI) B.V. among the financing entities.
Nord Stream 2 AG commenced Energy Charter Treaty arbitration against the European Union on 26 September 2019.
Its July 2020 memorial alleged breaches of investment protections and requested regulatory relief or, alternatively, financial compensation.
The European Union contested the tribunal’s jurisdiction on two principal grounds.
On 31 December 2020, the tribunal rejected the EU’s request for a separate preliminary jurisdictional phase.
The tribunal did not determine the substantive validity of those objections in that procedural order.
On 27 November 2024, the EU General Court dismissed Nord Stream 2 AG’s challenge to the 2019 gas directive.
The European Union’s withdrawal from the Energy Charter Treaty became effective on 28 June 2025.
Shell’s 2022 Annual Report recorded a full $1.126 billion write-down of its Nord Stream 2 loan.
The arbitration remains identified as pending in the official public case record.
Allegations and Contested Positions
Nord Stream 2 AG alleged that EU legislative changes unfairly discriminated against its investment.
It argued that the changes interfered with legitimate investment expectations and undermined the project’s commercial arrangements.
The European Union disputed the claimant’s interpretation of the treaty and objected to the tribunal’s jurisdiction.
It argued that the claimant had already pursued related proceedings before EU courts.
It also maintained that the alleged regulatory consequences would depend upon measures taken by Member States rather than conduct attributable to the EU itself.
The existence of these submissions is documented.
Their underlying allegations must not be presented as established findings.
Matters Not Established
The examined records do not establish that the European Union unlawfully expropriated Nord Stream 2.
They do not establish that the arbitral tribunal has awarded compensation.
They do not establish that Shell directed or participated in the arbitration.
They do not establish that Shell would be entitled to receive proceeds from any future award.
They do not establish that the European Union’s withdrawal from the treaty has terminated the proceedings.
They do not establish that Shell’s executives ignored legal warnings or concealed information from shareholders.
Those distinctions are essential to the accuracy of the archive.
EDITORIAL COMMENTARY: THE UNINTENDED LONG LIFE OF AN ENERGY INVESTMENT
There is a broader historical lesson in these documents.
International energy projects are frequently developed over periods measured in decades.
Their financial structures depend upon assumptions concerning political stability, market access, regulatory arrangements and long-term demand.
Those assumptions can change.
Sometimes the changes are gradual.
Sometimes they are sudden and catastrophic.
Nord Stream 2 experienced both.
Before Russia’s full-scale invasion of Ukraine, the project was already involved in a substantial legal dispute over European gas-market rules.
The proceedings concerned the rights of investors and the powers of governments.
Then came the war.
The pipeline’s commercial future changed dramatically.
Shell withdrew and recognised its financial loss.
Yet the original arbitration continued.
The fact that the European Union subsequently withdrew from the treaty under which the proceedings were commenced adds another layer of complexity.
A treaty designed to encourage long-term energy investment became controversial partly because of the protections it offered to investments that governments later considered undesirable.
That tension is not unique to Nord Stream 2.
It lies at the heart of a continuing international debate about the balance between investment protection and regulatory freedom.
Investors need predictable legal frameworks.
Governments need the ability to legislate in the public interest.
Neither proposition, standing alone, determines whether compensation is appropriate in a particular case.
The answer depends upon the applicable legal obligations and evidence.
From an archival perspective, the remarkable feature of Nord Stream 2 is how clearly its history illustrates the successive stages of international investment risk.
The financing commitments are documented.
The initial regulatory dispute is documented.
The arbitration submissions are publicly available.
The subsequent judicial decisions can be examined.
Shell’s financial write-down is recorded in its published accounts.
And the later complications arising from European sanctions have themselves generated further procedural orders.
For historians and shareholders, this creates an unusually extensive documentary trail.
The challenge is to avoid treating it as a single, uncomplicated story.
Nord Stream 2 was not one dispute. It became a sequence of commercial, legal, political and financial consequences extending across more than a decade.
The same distinction is essential when examining Shell’s historical involvement in Russia.
The company’s decision to withdraw from an investment does not necessarily close the historical record concerning how that investment was made, financed and assessed.
That record deserves careful examination.
SOURCE RECORD AND DOCUMENTARY PROVENANCE
The following primary and contemporaneous sources support this instalment.
1. Shell — 24 April 2017. The original corporate announcement confirms the financing agreements, participating companies, investment limits, project cost and Gazprom’s ownership of Nord Stream 2 AG.
Shell Corporate Press Releases 2017 — Nord Stream 2 Financing Announcement
2. Nord Stream 2 AG — 26 September 2019. The original arbitration notice identifies the claimant, respondent, legal basis, investment arrangements, alleged treaty violations and requested relief. It expressly names the Shell financing entity.
Nord Stream 2 AG — Original Notice of Arbitration
3. Reuters — 25 April 2019. Contemporaneous reporting establishes that Nord Stream 2 had warned the Commission of possible legal action before the arbitration formally commenced. It also records the Commission’s response.
Reuters — EU Says New Energy Rules Apply to Nord Stream 2
4. Nord Stream 2 AG — 3 July 2020. The claimant’s 192-page memorial sets out the allegations concerning investment protection, regulatory treatment, expropriation and the remedies requested.
Claimant’s Memorial — 3 July 2020
5. European Union — 15 September 2020. The EU’s memorial advances jurisdictional objections based upon the treaty’s dispute-resolution provisions and the attribution of alleged regulatory consequences.
EU Memorial on Jurisdiction and Request for Bifurcation
6. Permanent Court of Arbitration — 31 December 2020. Procedural Order No. 4 rejects the request for a separate preliminary jurisdictional phase without determining the substantive objections.
Procedural Order No. 4 — Full Decision
7. Court of Justice of the European Union — 27 November 2024. The official judicial announcement records the General Court’s dismissal of Nord Stream 2 AG’s challenge to Directive 2019/692.
Official Court Press Release 195/24
8. Shell — 2022 Annual Report and Accounts. Shell’s financial disclosures confirm the complete $1.126 billion write-down of its Nord Stream 2 loan.
Shell Annual Report and Accounts 2022
9. European Commission — Energy Charter Withdrawal. The Commission confirms the EU’s withdrawal from the treaty, effective 28 June 2025.
European Commission — Energy Charter
10. Energy Charter Treaty — Article 47. The treaty’s withdrawal provision establishes the framework for continuing protection of certain qualifying investments.
Energy Charter Treaty — Article 47
Archive disclaimer: This instalment draws upon authenticated corporate documents, international arbitration submissions, procedural decisions, legislation and judicial records. Allegations advanced by litigants are attributed to those parties and are not presented as findings of wrongdoing. Shell was a financier of Nord Stream 2 AG, not a claimant in the arbitration examined here. No finding is made that Shell directed the proceedings, concealed information or is entitled to any future arbitration recovery. Outstanding legal claims remain unresolved unless determined by the competent tribunal or court. Editorial commentary is distinguished from documentary findings.
The website’s general disclaimer also applies.
NEXT IN THE SHELL LEAKS FILES
SLF-2007-094 — The Sakhalin Papers LXXXIV: The Foreseeability Test — What Shell and Its Partners Knew Before the Nord Stream 2 Investment Was Written Off
The next instalment will examine one of the most consequential findings in the European General Court’s November 2024 judgment.
The court concluded that Nord Stream 2 AG had continued investing despite being able to foresee changes to European gas-market regulation.
That conclusion raises an important question for investors.
What information was available to Shell and the other European financiers when they entered the project in 2017?
What changed during the following three years?
And how should the regulatory dispute already underway in 2019 be understood alongside Shell’s confirmation that the final Nord Stream 2 loan instalments were made in the second quarter of 2020?
The next investigation will reconstruct the documentary chronology using Shell’s published statements, European legislative records, the claimant’s own evidence and contemporaneous reporting.
It will distinguish risks known at the time from developments that could not reasonably have been anticipated.
The objective will not be to impose hindsight upon historical investment decisions.
It will be to establish what the contemporary record actually shows.
Because there is a fundamental difference between an investment becoming unsuccessful through unforeseeable events and an investment proceeding while material risks are already apparent.
Shell’s financial loss is documented.
The precise history of the risks surrounding that investment deserves closer examination.
The Sakhalin Papers continue.
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