Russia: The law firm OrçLaw has shared with ROLLINGSTOCK its calculations on four main claims brought by the Russian operator against the German manufacturer. These claims relate to halting of the delivery and maintenance of Sapsan EMUs, halting of the maintenance of the Lastochka EMUs and the automation systems at the Luzhskaya marshalling yard.
Siemens announced its withdrawal from the Russian market in May 2022 and unilaterally stopped fulfilling its contractual obligations. In response, Russian Railways (RZD) and other companies, such as Ural Locomotives, filed a significant number of claims against the manufacturer. In 2023, the Russian courts sided with the operator.
OrçLaw lawyers have analysed the penalties imposed by the courts and the respective duration of the delay. “For four cases, Russian Railways claims a total penalty of RUB 59.4 mln ($0.65 mln) for each day of delay. Taking into account the duration of the delay, the penalty now amounts to RUB 25.9 bln ($283,3 mln)”, said Shamil Alaev, head of OrçLaw.
He points out that it will not be easy to recover the accumulated amount from German companies. “However, Russian legislation allows for interim measures such as sequestration to make the judgement enforceable. If Siemens has hidden assets in Russia or if new ones appear, they can be seized”, Mr. Alaev continues.
According to Sergey Belov, editor-in-chief of the ROLLINGSTOCK Agency, if the German company eventually decides to return to the Russian market, both RZD and the Russian government will take the growing amount of penalties into account when negotiating with the company and its government. “Unilateral termination of contracts is a bad business option that Siemens has demonstrated, and potential customers from BRICS countries can take this into account when discussing contracts. Moreover, the accumulated fines could seriously affect the company’s financial stability when the international legal environment normalises. What is more, the fines will have multiplied by then”, he said.
