Haas rejects Uralkali request to repay F1 sponsorship money

The Haas Formula 1 team has rejected a claim from former title sponsor Uralkali to refund $13 million already paid, and demanded a further $8.6m compensation for ‘loss of profits.’

Haas rejects Uralkali request to repay F1 sponsorship money
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In the immediate aftermath of Russia’s invasion of Ukraine back in March, the Haas team unilaterally terminated its Uralkali sponsorship deal because of the links the company’s owner Dmitry Mazepin had with the country’s president Vladimir Putin.

It also ended the deal it had with race driver Nikita Mazepin, who has since been replaced by Dane Kevin Magnussen.

At the time, Uralkali said it was considering legal action over the matter as it sought repayment of sponsorship money it had paid in advance of the season.

In a statement issued last month, the company said: “As most of the sponsorship funding for the 2022 season has already been transferred to Haas and 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.

"Uralkali shall request the immediate reimbursement of the amounts received by Haas.”

Uralkali subsequently wrote to Haas to dispute the team’s rights to terminate the contract, as well as request a refund of $12 million Euros ($13m) that had been paid in advance.

It has emerged, however, that Haas has now formally responded to the Uralkali letter and wholly rejected the company’s claims.

In the letter from the Haas team to the Russian company, a copy of which has been seen by Motorsport.com, the American-owned outfit team insists that it had a right to end the deal because of a clause in the sponsorship agreement which stated that Uralkali does not ‘injure, bring into dispute, ridicule, or lessen the public reputation, goodwill of favourable image of Haas’.

Haas removed all Uralkali branding on its 2022 car in Barcelona testing, before terminating the contract of Nikita Mazepin

Haas removed all Uralkali branding on its 2022 car in Barcelona testing, before terminating the contract of Nikita Mazepin

Photo by: Mark Sutton / Motorsport Images

Haas claims that the Mazepin ties to the Kremlin, allied to sanctions imposed by the European Union, triggered the disrepute clause. However, no sanctions had been imposed by the European Union or any other parties when the contract was terminated.

In the letter, Haas puts forward its argument as to why it believes the Uralkali sponsorship should not be repaid.

“According to unanimous legal scholars and case law, the party which terminates the agreement for breach of the other party is under no obligation to return to such party what it has already received under the agreement,” it states.

“The claim of Uralkali to obtain the re-payment of the down paid amount of EUR 12,000,000 is therefore ungrounded and rejected.”

Haas adds that beyond monies already paid, the team is also entitled to compensation for the loss of profits it believes would have been made if the Uralkali deal had continued.

It has subsequently demanded a payment of 8 million Euro in lieu of this, which it wants transferred in a matter of days.

Haas has also made clear that it will not fulfil a clause in its original contract for Uralkali to be given one of Mazepin's 2021 F1 cars until it has received the 8 million Euro payment.

The letter adds: “Unless and until the aforesaid amount will have been paid to Haas no obligation exists on Haas’ side to deliver and no delivery of the F1 car will occur.”

According to a source with good knowledge of the situation, Haas has also refused to pay Mazepin his salary for the time worked this season before his contract was cancelled.

Haas’s stance is understood to have left Uralkali astonished, with sources saying they are in ‘disbelief’ about the withholding of monies, the 2021 car and the demand for an extra payment.

One source said: “Everyone understands the world is in a difficult situation, but it is patently ridiculous to argue that Haas is entitled to keep money paid from a contract it exited unilaterally, without rendering any of the agreed upon services.

“They seem to be fine with spending Russian money – and even are asking for more - but don’t want to have any Russians around.

“It's a truly shocking treatment toward a title sponsor who stepped up last season when the team badly needed resources and who had offered to go above and beyond the contracted amounts to provide additional bonuses to team staff to achieve better results for all involved.”

Representatives of Uralkali and Nikita Mazepin declined to comment on the matter and instead referred to a previous statement that had been issued on the company website.

The Haas team was approached for comment but had not responded at the time of publication.

The matter now almost certainly looks to be heading to court, unless there is a last-minute change of approach from Haas in relation to the money.

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