Immediately following Russia’s invasion of Ukraine in March, the Haas team unilaterally terminated its Uralkali sponsorship deal over the ties the company’s owner, Dmitry Mazepin, had with the country’s president, Vladimir Putin.
It also ended the deal with racing driver Nikita Mazepin, who has since been replaced by Denmark’s Kevin Magnussen.
Uralkali said at the time it was considering legal action over the matter as it demanded the return of sponsorship money it paid before the season.
In a statement released last month, the company said, “Since the majority of the sponsorship funds for the 2022 season have already been transferred to Haas and the team terminated the sponsorship deal prior to the first race of the 2022 season, Haas has failed in its commitments to Uralkali to comply for this year’s season.
“Uralkali will demand immediate reimbursement of amounts received from Haas.”
Uralkali then wrote to Haas to contest the team’s right to terminate the contract and demand a refund of 12 million euros ($13 million) that had been paid in advance.
However, it has emerged that Haas has now formally responded to Uralkali’s letter, completely denying the company’s claims.
In the Haas team’s letter to the Russian company, a copy of which Motorsport.com has seen, the American-owned Outfit team insists it had the right to close the deal due to a clause in the sponsorship agreement stating that Uralkali “does not harm, dispute, ridicule, or diminish the public reputation, goodwill, or positive image of Haas.”
Haas removed all Uralkali branding from his 2022 car during tests in Barcelona before terminating Nikita Mazepin’s contract
Photo by: Mark Sutton / Motorsport Images
Haas claims that Mazepin’s ties to the Kremlin, coupled with European Union sanctions, triggered the notoriety clause. However, at the time the contract was terminated, no sanctions had been imposed by the European Union or any other party.
In the letter, Haas presents his arguments as to why he believes the Uralkali sponsorship should not be repaid.
“According to consistent case law and case law, the party terminating the Agreement for breach of contract by the other party is not required to return to that party what it has already received under the Agreement,” it reads.
“Uralkali’s claim for repayment of the advance payment of 12,000,000 euros is therefore unfounded and will be rejected.”
Haas adds that in addition to the monies already paid, the team is also entitled to compensation for the lost profits it believes would have accrued had the Uralkali deal gone ahead.
Instead, she asked for a payment of 8 million euros, which she wants to transfer within a few days.
Haas has also clarified that it will not honor a clause in its original contract that Uralkali will receive one of Mazepin’s 2021 F1 cars until it receives the €8 million payment.
The letter adds: “Until and until the above amount has been paid to Haas, there is no obligation on Haas to deliver and no delivery of the F1 car will take place.”
Haas also refused to pay Mazepin his salary for the time he worked that season before his contract was canceled, according to a source with good knowledge of the situation.
Haas’ stance is understood to have stunned Uralkali, and sources say they are “in disbelief” at the withholding of funds, the 2021 car and the demand for an additional payment.
A source said: “Everyone understands that the world is in a difficult situation, but it is patently ridiculous to argue that Haas is entitled to withhold monies from a contract it unilaterally exited without providing any of the agreed services.” provide.
“They don’t seem to have any problem spending Russian money – and even ask for more – but don’t want Russians around.
“It’s truly shocking treatment from a title sponsor who stepped in last season when the team was in dire need of resources and who had offered to go beyond what was contracted to give additional bonuses to team staff to ensure better results for everyone stakeholders.”
Uralkali and Nikita Mazepin officials declined to comment on the matter, instead referring to an earlier statement posted on the company’s website.
The Haas team was contacted for comment but had not responded at the time of publication.
The matter now appears almost certain to go to court unless there is a last-minute change in Haas’ approach to the money.