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Russian Defense Ministry sues German company Rheinmetall for contract breach

February 18, 2015, 15:41 UTC+3 MOSCOW
The contract with Rheinmetall was assessed at $120 million
1 pages in this article
© ITAR-TASS/Sergei Karpov

MOSCOW, February 18. /TASS/. Russia’s Defense Ministry has filed a lawsuit with a Swiss court against Rheinmetall, the German defense contractor whom the German government ordered to cancel a contract to supply the Russian military with a combat simulation center, a senior defense official said on Wednesday.

Rheinmetall was to supply laser fire imitators for a range in the Nizhny Novgorod region (Volga area), First Deputy Defense Minister Arkady Bakhin told reporters. "We have claimed penalties from Rheinmetall. The claim is now considered by a Swiss court," he said.

Deputy chairman of the board of the Russian Military-Industrial Commission Oleg Bochkaryov told TASS previously that the ministry had notified Rheinmetall of financial claims for the Mulino range contract breach in early December 2014. According to Bochkaryov, if Russia decides to build a new range of this type it would not cooperate with the German company. "A new range would be fully Russian-made," the official said. Bakhin confirmed on Wednesday that new laser fire imitators for the Mulino range will be made by Russia.

The cost of the contract with Rheinmetall was assessed at $120 million, but the deal was disrupted by German authorities. Russian Deputy Defense Minister Yuri Borisov said later that Russia’s Transas Group may supply part of the combat simulators.

The case highlights the legal risks arising for Western companies with business in Russia as the United States and the EU are stepping up punitive measures against Moscow over its role in the Ukraine crisis.

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