Nikolai Novichkov, MoscowZ
IHS Jane’s Defence Weekly
30 September 2014
Russia is preparing legal action against France over the country’s halt in the delivery of the Mistral-class landing helicopter dock (LHD) Vladivostok , Russian sources have told IHS Jane’s.
“We hope that despite the repeated statements of the French party concerning the possible refusal to hand over in late October through early November Vladivostok , the first of the ordered ships, it will eventually be delivered to Kronstadt where it will get a superstructure and onboard weapons. Anyway, the Rosoboronexport lawyers have received orders to start preparing all possible claims against DCNS as a contractor,” a source involved in implementing the Franco-Russian contract told IHS Jane’s.
France postponed delivery of the first of two Mistral-class warships under construction for Russia in September as a result of the situation in Ukraine.
According to the source, if the contract is disrupted, the French party will have to pay Russia around EUR3 billion (USD3.8 billion). “The contract has an item concerning a possible direct refund if the French party fails to fulfil the signed agreement. In this case, DCNS’s direct refund alone due to the Russian party will amount to EUR1.050 billion,” the source stated.
“Moreover, the Russian party has the right to enforce, via court proceedings, imposition of extra fines on DCNS and refunding of its expenses on materials and other costs associated with transportation to and construction in France of two stern components for the LHDs Vladivostok and Sevastopol . Considering those penal sanctions and refunding of expenses, the Russian party may obtain, in case of a positive court ruling, another EUR1.8 billion,” he added.
Vice-Premier Dmitry Rogozin declared that Russia can do without the Mistral-class LHDs. In doing so, Rogozin accentuated that the French statements that the contract may be abolished and the LHDs handed over to somebody else, are legally unsubstantiated. “It should be borne in mind that France’s ‘we will or will not supply the dock’ game played with the Americans is a far cry from fair play,” Rogozin said.
“A third of the LHDs have been assembled in our country. The sterns of the Mistrals were built at the shipyard in St Petersburg. Therefore, if the French wish to leave the LHD with them, we’ll have to tear the sterns away and return them to the manufacturers for building other ships.” For the self-same reason “such half-docks can’t be handed over to anybody. Secondly, the money has been paid and it must be given back with fines. Thirdly, France risks not only its money, but, more importantly, its reputation as a reliable supplier in military technical co-operation. It’s up to them if they are prepared to risk their reputation. In this case, however, give back our money and sterns and say Auf Wiedersehen to your good business name,” said Rogozin.
A source in Russian military diplomatic circles expanded on Rogozin’s view, saying they believed that the potential damage done to France’s reputation as a “reliable supplier” by the Mistral issue could even cloud India’s selection of the Dassault Rafale for its Medium Multi-Role Combat Aircraft programme – and lead Delhi to issue a new tender.