Russia to collect delay damages unless France explains Mistral situation by late January - source

Russia is expecting France to formally explain why the deadlines for the delivery of Mistral-class helicopter carriers have been disrupted, a military diplomat told Interfax-AVN on Monday.

Russia is expecting France to formally explain why the deadlines for the delivery of Mistral-class helicopter carriers have been disrupted, a military diplomat told Interfax-AVN on Monday.

"Pursuant to terms of the contract, the first Mistral-class helicopter carrier [named the Vladivostok by Russia] was due to be delivered by France to the Russian Navy last fall. The contract allowed for delaying the delivery by three months, i.e. until the end of January, for technical reasons. We will have to insist on collecting delay damages from France unless we are given formal explanations regarding prospects of the delivery of the first helicopter carrier," the source said.

He said Russia might unilaterally reject the delivery of helicopter carriers due to France's failure to meet the contract terms. In that case France would have to pay back every upfront payment of Russia.

"In addition, Russia will have a right to file a lawsuit with an international court to seek compensation for damages as France has suspended the delivery of helicopter carriers for political reasons which are not defined as force majeure circumstances by the contract," the source said.

Russia may claim one, three or five billion euro but, as global practice shows, the claim will hardly be met, he said.

The sanctions imposed on Russia by the European Union cannot be a reason to deny the delivery of helicopter carriers because they do not apply to earlier military-technological contracts, he noted.

"France has found itself in this impasse through its own fault and it now has to find a way out. As to Russia, we will be satisfied by any scenario. As we have said many times before on the top level, the Russian Navy can do without French helicopter carriers. If France refuses to deliver Mistral-class ships, the least we can do is get our money back. If the delivery is made after all, we may collect delay damage envisaged by the contract from the French side for each day of the delay," the source said.

The crew of the first Mistral-class ship, the Vladivostok, which has been trained in Saint Nazaire, France, will be staying in Russia until a final decision is made on the delivery, he added.

Russia's state arms trader Rosoboronexport and France's DCNS signed a contract to build two Mistral-class helicopter carriers in June 2011. St. Petersburg-based Baltiysky Zavod, part of the United Shipbuilding Corporation, built the sterns. The STX France Saint Nazaire shipyard attached the sterns to the bows and put the finishing touches to the ships. The contract value stands at 1.2 billion euro.

French President Francois Hollande said he had decided to postpone the Vladivostok's delivery to Russia over the Ukraine crisis. Russia has said that it expects to receive either the ships or the refund.

Read more: Lawsuit demanding France's implementation of Mistral delivery deal may be filed within six months>>>

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