A verdict has been reached by the Swiss arbitration court in the ongoing dispute between the Haas F1 Team and former sponsor Uralkali.
The legal dispute between the two parties was rooted in Haas' decision to terminate its sponsorship agreement with Uralkali following Russia's invasion of Ukraine in 2022.
The ruling brings closure to a disagreement over the $13 million Formula 1 sponsorship deal and a compensation claim made by Uralkali after the departure of Nikita Mazepin from the Haas team.
The conflict began in March 2022, during pre-season testing when Haas announced the dismissal of Mazepin, who had raced for the US outfit along with Mick Schumacher the prior season.
Mazepin owed his drive with the team to his father’s lavish sponsorship which was channeled through Dmitry Mazepin’s company, Russian fertilizer giant Uralkali.
After Haas severed ties with the Mazepin family, Uralkali sought a full refund of the $13 million fee paid to the team ahead of the 2022 F1 season.
The company justified its legal action by stating they it was "acting to protect its interests in line with applicable legal procedures and reserves its rights to initiate judicial proceedings, claim damages and seek repayment of the significant amounts Uralkali had paid for the 2022 Formula 1 season".
At the time, Uralkali argued that it had provided "most of the sponsorship funding for the 2022 season" to Haas and felt that "given that the team terminated the sponsorship agreement before the first race of the 2022 season, Haas has thus failed to perform its obligations to Uralkali for this year's season."
Haas counter-sued however, vehemently denying Uralkali's claims, leading the matter to court. Now, with the verdict in, both sides appear to be claiming victory.
"The tribunal found that Haas was in violation of the contract and obliged the team to pay compensation to Uralkali" read a statement from the Mazepin camp.
"The tribunal also rejected all of the team's counterclaims toward the company".
But on Sunday, Haas fired off its own interpretation of the ruling, stating that "the arbitration panel ruled that Haas had 'just cause' to terminate its sponsorship contract with Uralkali, and denied Uralkali's claims for breach of contract".
"Haas terminated its agreement with Uralkali on 4 March 2022, shortly after Russian military forces invaded Ukraine,” continued the US outfit’s statement.
"The arbitration panel ruled that, in light of all the facts relating to the parties' relationship, including Uralkali's association with Russia, Haas 'could not be expected to continue the Sponsorship Agreement under such circumstances'.
“The Arbitral Tribunal finds that Haas had a just cause to terminate the Sponsorship Agreement'.
"The panel emphasised that multiple other sports organizations severed their ties with Russian companies immediately after the invasion of Ukraine, and thus there was a risk 'that Haas could rapidly be the last non-Russian sport team continuing with a Russian name sponsor.'
"Accordingly, the panel ruled that the sponsorship was effectively terminated on the date of Haas's notice of termination, and ordered that Haas retain the portion of the sponsorship fee for the period before the termination, and refund any balance to Uralkali."
To be clear, the arbitration court's decision allows Haas to retain the portion of the sponsorship fee that covered the period leading up to March 4th, 2022.
The team is however required to refund the remaining balance of the $13 million total to Uralkali. Additionally, Haas is not obligated to provide any compensation to Uralkali.
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