Judgment in Russia - Court orders VW to pay damages to former partner Gaz
A Russian court has ordered Volkswagen to pay Gaz billions in damages. The court in Nizhny Novgorod on the Volga River granted part of Gaz's lawsuit against VW on Tuesday and ordered VW to pay 16.9 billion Rubles (around 177 million Euros), confirmed Europe's largest carmaker to the German Press Agency. "The judgment is not yet binding and the reasons for the judgment are not yet available," explained a company spokesperson. "We will examine and evaluate the reasons for the judgment to decide on further legal steps."
Gaz sued Volkswagen for damages in early 2023 after Volkswagen withdrew from Russia and terminated cooperation with Gaz. In Gaz's factory in Nizhny Novgorod, several models of the Volkswagen core brand and the Czech subsidiary Skoda were assembled. After the US sanctions against Gaz due to the Russian war in Ukraine became effective in May 2022, Volkswagen withdrew from the co-manufacturing and offered compensation to the employees.
Production Stop after Attack on Ukraine
The production, which had already been stopped in Volkswagen's own plant in Kaluga 150 kilometers southwest of Moscow, was then suspended in March 2022 after the attack on Ukraine. Volkswagen also stopped the export of vehicles to the country for all brand models.
The plant in Kaluga was then sold by Volkswagen to the Avilon Trading Group in May 2023. Gaz then withdrew one of its two damage claims. The remaining claim was partially granted by the court in Nizhny Novgorod. Of the 28.5 billion Rubles Gaz demanded, 16.9 billion Rubles were granted to the company. All other claims of Gaz were rejected by the court. Gaz was known in the Soviet era for building the Wolga Limousine, which was also used as taxis in the GDR.
- The German Press Agency reported the court's decision, with Volkswagen ordered to pay Gaz a significant compensation payment from Russia.
- The legal process against Volkswagen in Nizhny Novgorod, located on the Volga River, resulted in the court's favor towards Gaz.
- Volkswagen's partner, Gaz, initially sued the automotive giant for damages in early 2023, following the withdrawal and termination of cooperation.
- The production halt at Volkswagen's plant in Lower Saxony's Wolfsburg was mirrored by the suspension in Kaluga, a city in Russia near Nizhny Novgorod, after the crisis in Ukraine.
- European and German justice systems have been implicated in the ongoing saga, with Gaz seeking to recover losses caused by Volkswagen's actions.
- Volkswagen's departure from Kaluga's automotive industry left room for the Avilon Trading Group to step in, purchasing the plant in May 2023.
- Despite Volkswagen's compensation offer to employees affected by the US sanctions, Gaz pressed on with their partial court claim against the German company.
- Gaz, a renowned name from the Soviet era, built iconic vehicles such as the Wolga Limousine, which was popular in cities like Nizhny Novgorod and, interestingly, East Germany.
