The Arbitration Court of Nizhny Novgorod Region has partially granted Gorky Automobile Plant's (GAZ) lawsuit against Volkswagen, ordering the German automaker to pay 16.9 billion rubles ($232 million) for undelivered engine supplies, according to Lenta.
Breached Obligations
During the proceedings, GAZ representative Denis Golubev stated that since 2021, "Volkswagen Aktiengesellschaft" had breached its obligations under the diesel engine supply contract and fully terminated the agreement in March 2022.
Golubev emphasized that the entire extent of the loss had been substantiated, hence GAZ insists on full compensation totaling 28.401 billion rubles ($390 million).
"The parties failed to agree on the localization of engine production within the stipulated period. The supply contract from January 2022 was indefinitely extended," he added.
Significant Loss
GAZ estimates the contract failure for Volkswagen and Skoda car assembly at its Nizhny Novgorod plant has led to significant losses. These include 20.7 billion rubles ($285 million) in lost profit, 2.4 billion rubles ($33 million) in unfulfilled investments in assembly lines, and 5.2 billion rubles ($71 million) in damages to distributors due to vehicle shortages. GAZ also seeks 40,000 euros for undelivered packaging materials.
Following the onset of the Ukraine conflict, Volkswagen ceased car assembly operations in Russia. GAZ filed the lawsuit against Volkswagen Aktiengesellschaft in March 2023, initially seeking 15.6 billion rubles ($215 million) in compensation.
