Law firm Freshfields is ending its long-standing relationship with the Russian energy giant.
(Photo: Reuters)
Cologne Not long ago, commercial law firms boasted about their relationships with Russian clients. Clients such as Gazprom or Nord Stream were seen as evidence of special expertise. These days are over since Russia’s invasion of Ukraine last Thursday. The international community reacted to the attack with tough economic sanctions.
Suddenly many Russian clients are also toxic for lawyers – and some law firms have reacted and cut ties. According to information from the Handelsblatt, the German-British law firm Freshfields Bruckhaus Deringer has stopped working for Nord Stream 2 – despite a long-standing, intensive client relationship.
Freshfields had fought against regulatory requirements for Nord Stream 2, among other things. When the pipeline was to be subject to EU gas market regulation, Freshfields lawyers were still arguing at the end of 2020 that Nord Stream 2 was “of vital interest to European industry and European gas customers”. Ukraine’s economic interest in continuing to benefit from gas transit is understandable. However, this cannot “call into question the realization of a modern, efficient infrastructure that makes gas transport cheaper and safer”.
A few days ago, Chancellor Olaf Scholz prompted the Federal Network Agency to stop approving the controversial pipeline. This has made it highly unlikely that Russian gas will ever flow through the tube. The eleven billion euro project is likely to go down as one of the largest investment ruins in the history of Europe.
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Freshfields declined to comment on the Nord Stream 2 mandate due to the “strict confidentiality obligations towards our clients”. However, in some cases the war has already been reacted to – both in relation to current mandates and in relation to new requests for mandates. “We comply with our legal and professional obligations in line with our values and regardless of the business impact,” a firm spokesman told Handelsblatt.
>> Read about this: This is how the Ukraine war changed German energy policy
Like Freshfields, competitor Gleiss Lutz also advises on energy law and has mandates related to Russia. Some companies of the Gazprom Group rely on Gleiss legal advice. The law firm also advised the Swiss company Nord Stream, a joint venture between Gazprom and the four European companies Eon, Wintershall Dea, Gasunie and Engie – not to be confused with Nord Stream 2, a 100 percent subsidiary of the Russian state-owned company Gazprom.
“We are not accepting new Russian clients”
Gleiss emphasizes that he only advises very few other Russian companies. The law firm strongly condemns the invasion of Ukraine by Russia. “Therefore, we immediately decided not to accept any new mandates for Russian clients,” said a spokeswoman. Ongoing cases would be carefully examined to see if it was legally possible to dismiss them. “We are not providing any consulting services to Gazprom or any of its subsidiaries while we are considering the resignation of mandates,” the spokeswoman said.
However, one must ensure that there is an orderly exit from the mandate. “There are professional questions to consider, but also other legal aspects. In these very few cases, it is all about purely regulatory procedures that have been going on for years,” said the spokeswoman. Gleiss Lutz assumes that we will have clarified the formalities for resigning from the mandates in a few days.
Linklaters, which also counts Gazprom among its clients, was cautious. Most recently, the Magic Circle law firm advised the energy company on restructuring issues. “We are currently reviewing all of our Russia-related work,” a spokeswoman said. However, no information can be given about specific clients or mandates at the current time.
More: The first German companies are withdrawing from business in Russia