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Defence firm wants damages from Germany over blocked Russia contract

by Staff Writers Berlin (AFP) March 13, 2015 AFP

Defence technology and auto parts group Rheinmetall has demanded 120 million euros in damages from the German government after Berlin blocked a major contract with Russia over the Ukraine conflict, reports said Friday.

The contract signed in June 2011 and worth 100 million euros ($105 million) involved providing a camp to train 30,000 Russian troops per year.

In March 2014, German Economy Minister and Vice Chancellor Sigmar Gabriel blocked the contract before definitively suspending it in August.

Russia had immediately announced its intention to file a complaint against the German firm for breach of contract.

Various German news media outlets reported Friday that Rheinmetall had filed its demand for damages with the country's Federal Export Control Office.

The economy ministry confirmed the complaint had been filed and said it would be examined, the reports said.

Rheinmetall said in February that underlying profit was down last year due to the government decision to veto the contract.

The company said that operating profit declined to 160 million euros in 2014 from 213 million euros a year earlier.

Russia is under heavy sanctions from the United States and the European Union over its alleged support of separatists in eastern Ukraine. Moscow denies the accusations.

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