Russian court orders VW to pay damages
A Russian court has ordered Volkswagen to pay compensation in the amount of 16.9 billion Rubles (approximately 180 million Euros) to its former business partner GAZ. The judges set the payment amount according to the report from the Interfax agency. Initially, GAZ had demanded 28.4 billion Rubles in compensation for lost profits due to Volkswagen's exit from the Russian market. GAZ and Volkswagen did not respond to the request for comment.
GAZ had worked as a contractor for Volkswagen and produced vehicles from the Wolfsburg carmaker in its plant in Nizhny Novgorod. After Russia's invasion of Ukraine, Volkswagen terminated the cooperation. In the aftermath, GAZ brought a series of lawsuits against Volkswagen, seeking compensation in the millions. The company demanded compensation because engines were no longer delivered. However, a claim by GAZ for freezing of assets in Russia was denied.
Volkswagen halted production at GAZ in Nizhny Novgorod and in its plant in Kaluga south of Moscow following Russia's invasion of Ukraine. The plant was sold to new owners after months of back-and-forth with the authorities in May 2023.
- Despite the compensation of 16.9 billion Rubles ordered by the Russian Court of law, GAZ initially sought double that amount, 28.4 billion Rubles, as compensation for lost profits and discontinued profits due to Volkswagen's withdrawal from the Russian market.
- Regardless of the payment, Volkswagen's termination of its partnership with GAZ and subsequent halt of engine deliveries resulted in significant profits losses for GAZ, which was seeking equalization through legal channels.
- The court's decision to order Volkswagen to pay compensation for damages to GAZ could potentially impact Volkswagen's future business operations in the Russian market, as it may influence other potential business partners' perceptions of the company's willingness to uphold its agreements.
