Summary

Decision on Challenge to Mr. Peter Rees QC PCA Case No. AA761
9 December 2019

I. INTRODUCTION

1. This challenge arises in an arbitration between Nord Stream 2 AG (the "Claimant", or "NSP2AG") and the European Union (the "Respondent", and together with the Claimant, the "Parties") under the Arbitration Rules of the United Nations Commission on International Trade Law, 15 December 1976 (the "UNCITRAL Rules") pursuant to Article 26 of the Energy Charter Treaty (the "ECT"). The dispute relates to, among other matters, the Respondent's enactment of Directive (EU) 2019/692, amending Directive 2009/73/EC of 13 July 2009 concerning common rules for the internal market in natural gas. According to the Claimant, the new directive adversely affected its investments in the Nord Stream 2 pipeline, an offshore import pipeline that will transmit natural gas from Ust-Luga, Russia to Lubmin, Germany. The Claimant contends that the new directive and the Respondent's actions in connection with the new directive amount to a breach of Articles 10(1), 10(7), and 13 of the ECT.

2. This decision concerns a challenge brought by the Respondent against Mr. Peter Rees QC who was appointed as arbitrator by the Claimant. The Respondent claims that, although Mr. Rees has no direct financial interest in the Claimant, he has a financial interest in Royal Dutch Shell Plc ("Shell"), a financing partner of the Claimant on the project that forms part of the subject matter of this arbitration. Further, the Respondent cites Mr. Rees' former employment as Shell's Legal Director and member of its Executive Committee. For the Respondent, these circumstances give rise to justifiable doubts as to Mr. Rees' impartiality or independence to act as an arbitrator in this arbitration.

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V. DECISION

NOW THEREFORE, I, Hugo H. Siblesz, Secretary General of the PCA, after having established to my satisfaction my competence to decide this challenge in accordance with the UNCITRAL Rules, and having considered the comments of the Parties and of Mr. Rees; HEREBY UPHOLD the challenge brought by the Respondent against Mr. Peter Rees QC. Done in The Hague on 9 December 2019,

Hugo H. Siblesz