Swiss court rules in favour of former Haas title sponsor following legal dispute

A lengthy court battle between Haas and a former title sponsor has resulted in the F1 team being ordered to pay a significant sum.

Following Haas severing its ties with former title sponsor Uralkali immediately after the commencement of Russian military action in Ukraine in early 2022, a Swiss court has settled a dispute between the two parties by siding with the Russian company.

Swiss court rules in favour of Uralkali

Uralkali, one of the world’s largest producers of potash, became a title sponsor of the Haas F1 team in 2021 as the American squad signed Nikita Mazepin to its driver roster alongside Mick Schumacher.

Mazepin is the son of Dmitry Mazepin, a Russian oligarch and the former chairman of the company – he relinquished his controlling stake shortly after the military action began.

With the Mazepins having a close association with Vladimir Putin’s administration, both father and son were added to the EU’s sanctions list in early 2022 – they were both added to the UK’s list shortly afterwards.

The EU lifted sanctions against Mazepin junior earlier this year, with the court ruling a closer association beyond simply family relations was needed.

With Haas immediately choosing to drop Mazepin as a driver, and Uralkali as a team sponsor, the Russian company immediately sought to take the matter to court with an arbitration tribunal investigating the two sides under Swiss arbitration rules.

The dispute focused on the nature of the termination of the sponsorship contract and found in favour of Uralkali, awarding the potash producer compensation.

A press release from Uralkali stated that “the tribunal found that Haas was in violation of the contract and obliged the team to pay compensation to Uralkali.

“The tribunal also rejected all of the team’s counterclaims toward the company.

“The arbitral award puts an end to the dispute between Uralkali and Haas regarding the sponsorship agreement.”

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What were the terms of the dispute between Uralkali and Haas?

The tribunal investigated Uralkali’s claims that it was entitled to repayment of the monies handed over to Haas for its title sponsorship agreement for 2022.

A statement released by Uralkali in early 2022 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 requested a refund of $13 million that had been paid to the team, with Haas rejecting the claim on the basis 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’.

Given the Mazepin ties to Putin, and the resulting sanctions that had been imposed upon the Mazepins by the EU and UK, Haas argued the disrepute clause had been triggered. The sanctions had not yet been imposed at the time of the severing of ties.

Following the Swiss court’s ruling on Haas and Uralkali, the Russian company says it fully anticipates Haas to fulfil its legal obligations “without undue delay”, with the funds being used for the development and modernisation of Uralkali’s production facilities.

PlanetF1.com has approached the Haas F1 team and Uralkali for comment on the court ruling.

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