Summary

I. PROCEDURAL BACKGROUND

1. On 1 October 2025, the Claimant wrote to the Tribunal to draw its attention to Article 5af of Council Regulation 2025/1494 of 18 July 2025 amending Council Regulation No 833/2014 ("the Regulation").1 The Regulation prohibits the direct or indirect engagement "in any transaction in connection with the natural gas pipelines Nord Stream and Nord Stream 2". In its communication, the Claimant requested the Tribunal to invite the Respondent to confirm that the Regulation does not in any way affect the continuation of this Arbitration.

2. On 6 October 2025, the Respondent confirmed that the European Commission considers that the Regulation "does not affect the continuation of these arbitral proceedings in any way".

3. On 14 October 2025, the Claimant informed the Tribunal that it had, on 13 October 2025, applied to the General Court of the European Union to annul Article 5af of the Regulation on the ground of illegality. The Claimant submitted that the Regulation nevertheless remained "directly and immediately applicable", exposing the Claimant and its staff, the Tribunal, the PCA, experts, witnesses, and counsel to the risk of breaching EU sanctions. The Claimant also argued that "[a]pplying for an authorization pursuant to Art. 5af (3) (d) is not an option." The Claimant therefore requested the Tribunal suspend the Arbitration until the General Court of the EU provides a ruling on the Regulation's application.

4. Later on the same day, the Respondent submitted that "the European Commission, acting as representative of the European Union in these proceedings, has confirmed and confirms once again that it considers that Article 5af of [the Regulation] does not affect the continuation of these proceedings". It added that "the European Commission, acting as representative of the European Union, is not in a position for constitutional reasons, to provide further assurances regarding the definitive interpretation of the legal provision at issue, which can be made only by the Court of Justice of the European Union". As a result, it requested that the Tribunal exercise its "best judgement" in determining whether to suspend the proceedings.

5. On 15 October 2025, the Claimant once again noted its concerns on the risk of application of the Regulation to the Arbitration and reiterated its request for the suspension of the proceedings.

6. On the same day, the Respondent's communication repeated the Commission's interpretation that the Regulation does not affect the continuation of the present proceedings. The Respondent also argued that the European Commission could not purport to bind the EU courts and therefore could not provide "the kind of absolute guarantees demanded by the Claimant". It submitted that the interpretation of the Regulation was sub judice since it was under legal challenge, and it would therefore be inappropriate for the Respondent to debate its interpretation. It added that it would continue to cooperate in good faith.

7. On 22 October 2025, the Tribunal issued Procedural Order No. 18, which suspended the Arbitration and invited the Parties to address the risks posed by the Regulation, as follows:

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26. However, when requested by the Tribunal to clarify the operation of this procedure, and to assist the Tribunal to avail itself of this procedure, the Respondent's answers have been limited and wanting. As the Claimant puts it:

First, in response to the Tribunal's question as to which specific transactions require an authorization, Respondent's answer is: "any transaction that meets the requirements for an authorization, according to Article 5af (3)". Simply referring to Article 5af (3) with no further explanation and clarification is imprecise and circular, at best. Secondly, Respondent's answer to the Tribunal's question as to who must apply for authorizations is generic and unclear. Which parties of a transaction must apply for an authorization? Is it Respondent "in the first place" and who would be "other applicants" in this arbitration? Such questions of high practical relevance require clear and specific answers. Finally, we understand from Respondent's answers, that the procedure referred to in Article 5af (3) (d) requires multiple authorizations in various Member States. Respondent notably does not further specify what this means in practice for this arbitration.7

27. The Parties are reminded of their duty to cooperate with the Tribunal so as to progress these proceedings and that, under Article 40 of the UNCITRAL Rules, the Parties' conduct during the course of proceedings may be a relevant consideration in the Tribunal's allocation of costs.

28. With the foregoing in mind, the Tribunal requests the Respondent to provide a more detailed and particularized answer to whether and how the PCA, acting on its own or on behalf of the Members of the Tribunal, could obtain one or more authorizations under Article 5af(3)(d) sufficient to allow for the risk associated with Article 5af to be adequately addressed. The Respondent should, for this purpose, assume that such risk exists and that the authorization(s) should cover each and every relevant transaction that is reasonably taken in connection with this Arbitration, both with respect to the Tribunal and the Claimant.

So ordered by the Tribunal.

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Footnotes omitted