IMAGO / HochZwei
Haas F1 has responded to Uralkali’s demand for the team to repay the sponsorship money after terminating the contract with the former title sponsor and driver Nikita Mazepin, whose father owns the company.
According to a report from Motorsport.com, the Formula One team rejected the $13 million demand and in turn asked for compensation from the Russian company.
Haas F1 terminated the contract with Mazepin and title sponsor Uralkali, the company his father, Dmitry, owns in early March before the second round of preseason testing. Russia invaded Ukraine on Feb. 24, and, later that day, Haas F1 announced it was dropping its Uralkali livery for the third day of preseason testing at Circuit de Barcelona—Catalunya, electing to drive a plain white car instead.
“As with the rest of the Formula 1 community, the team is shocked and saddened by the invasion of Ukraine and wishes for a swift and peaceful end to the conflict,” the team said in a statement when announcing the terminated contract.
Nikita and Dmitry were added to the European Union sanctions list just a few days after the contract was terminated. The EU cited Dmitry’s meeting with President Vladimir Putin on Feb. 24 as the reason they are on the list, saying it’s evidence that he is “supporting or implementing actions or policies” that threaten Ukraine.
As for Nikita, it’s because, the EU said, he is “a natural person associated with a leading businessperson (his father) involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation.”
Kevin Magnussen replaced the Russian driver.
In response to the termination, Uralkali issued a statement last month, saying, “As most of the sponsorship funding for the 2022 season has already been transferred to Haas and 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.
“Uralkali shall request the immediate reimbursement of the amounts received by Haas.”
In addition to writing to the team, the company requested a refund of approximately $13 million, which was paid in advance of the season, per Motorsport.com.
Haas F1 formally responded, and per a copy of the letter seen by Motorsport.com, the U.S.-owned team cited a clause for why it could terminate the agreement: Uralkali does not “injure, bring into dispute, ridicule, or lessen the public reputation, goodwill of favourable image of Haas.”
Between the Mazepin’s connections to the Kremlin and the subsequent sanctions handed out by the EU, Haas F1 reportedly said that violated the clause. However, at the time of termination, the Mazepins had not yet faced any sanctions.
“According to unanimous legal scholars and case law, the party which terminates the agreement for breach of the other party is under no obligation to return to such party what it has already received under the agreement,” the letter read, per Motorsport.com. “The claim of Uralkali to obtain the re-payment of the down paid amount of EUR 12,000,000 is therefore ungrounded and rejected.”
However, the team then made a demand of its own: recouping the loss of profits it believes it could have made with the title sponsor, amounting to €8 million (roughly $8.7 million). Haas F1 proceeded to tell the company that until it receives the payment, it will not fulfill another aspect of the initial agreement—sending one of Mazepin’s F1 cars to them.
