Haas F1 rejects Mazepin’s request for return of sponsor money

Photo by: www.kymilman.com/f1

I’m not sure if this is the last we will hear about Uralkali and Haas F1 parting ways earlier this year. Given the recent asset freeze and the amount of press the Mazepin family have been generating, they seem very displeased and litigious.

Haas dropped Dmitry Mazepin’s company Uralkali and his son, Nikita, as their sponsor and driver a few weeks after Russia invaded Ukraine.

Given the freezing of assets held by Mazepin and sanctions, you might think that his F1 involvement would be the least of his concerns but perhaps the cash would be more important now than ever given circumstances.

When Haas F1 announced they were dropping Uralkali, the Mazepin’s released a statement:

“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.”

An article by Jonathan Noble over at Motorsport says that Uralkali wrote to Haas requesting a refund of $13M that was paid in advance but Haas has rejected that request based on a clause in their contract which Motorsport says they have seen.

The letter stated that the team ended the deal via a clause in the sponsorship agreement which stated that Uralkali does not ‘injure, bring into dispute, ridicule, or lessen the public reputation, goodwill of favorable image of Haas’.

Mr. Noble does make an interesting point with regards to timing suggesting that at the time Haas killed the sponsor deal, there were no sanctions imposed by the EU or any other parties.

The letter continued:

“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.”

As Mr. Noble points out, Haas not only rejected the request for a refund but they demand a payment within days of $8M due to lost revenue they claim they would have made had the relationship continued. They have also said that the Mazepin’s would not receive one of the 2021 cars, which the contract included, until they receive the $8M payment.

What I appreciate about Mr. Noble’s article is that he has represented both sides of a situation—something we always try to do and is very rare with today’s junior journalists—and quoted a source close to the situation.

“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.”

One would presume this issue will head to court but I’m curious about all the other major sanctions targeting the Mazepin’s and their holdings. Perhaps they are not as exposed to the kinds of losses that the Haas F1 deal presents them with but I would find that hard to believe. IT seems the high-profile exposure of the F1 issue is a bigger springboard for them which has turned into a magnified humiliation. Maybe that’s why they are fighting this as hard as they are? Time will tell.

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The timing of the Haas rejection of the Russians is important, what Noble has missed is that there were two major censures of Russia before the sanctions were passed – one by the UN General Assembly and the other by the UK Parliament (followed by 10 other countries). Those censures were a legal step before sanctions (built on the censures). Kind of like a govt MOU (memorandum of understanding) leading to an AOU (agreement of understanding) leading to MOA (memorandum of agreement) leading to an Agreement. Govts take these legal steps.