The Swiss arbitration court mediating the dispute between the Haas Formula 1 team and Uralkali over the former’s decision to end their sponsorship agreement following Russia’s 2022 Ukraine invasion has issued a ruling.
The two sides had been in dispute since March 2022, when it was announced Nikita Mazepin had been let go from the team where he had raced for the previous season and to which his father’s fertiliser company had been the title sponsor.
Uralkali was seeking a refund on the $13 million fee it already paid to Haas to cover the 2022 season.
At the time, Uralkali claimed 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”.
The company said 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 then wholly rejected Uralkali’s claims and the matter went to court, with both sides now claiming victory.
On Thursday, Uralkali claimed in a statement “The tribunal found that Haas was in violation of the contract and obliged the team to pay compensation to Uralkali” and said, “The tribunal also rejected all of the team’s counterclaims toward the company”.
Nikita Mazepin, Haas F1 Team
Photo by: Carl Bingham / Motorsport Images
Then on Sunday, Haas released a statement saying “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”.
The statement added: “Haas terminated its agreement with Uralkali on 4 March 2022, shortly after Russian military forces invaded Ukraine.
“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’, and concluded that “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.”
The ruling – based on Haas’s release – means it can keep the portion of the sponsorship fee that covered the time up to 4 March 2022, refund the balance of the $13 million total and not have to pay compensation to Uralkali.