We all know about the war that is taking place between Ukraine and Russia. The Russian invasion on that country began in March, and was a trigger for various sanctions against the country led by Vladimir Putin. Formula 1 decided not to take action against companies and drivers with Russian nationality (except that they had to race with some other nationality due to the problems that Russian athletes have in anti-doping issues), however, the Haas team decided to take reprimands against its Russian driver, Nikita Mazepin, and its main sponsor (also of Russian origin), Uralkali. The Mazepin family has a lot of contact with the Russian president, Vladimir Putin, for which Haas decided to terminate the contract of the driver and the company with immediate effect, with Kevin Magnussen replacing him.

The Russian company had provided a large amount of money before the season started, however, when Haas decided to part ways with Uralkali, the American team did not return the money it had already received, to which the company stated that it was closely monitoring the situation to find out if they were going to take legal action. Later, Uralkali released a statement which comments: “As most of the sponsorship funding for the 2022 season has already been transferred to Haas and given 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 amount received by Haas.”

Similarly, the Russian company decided to send a formal letter to the North American team to dispute the team's rights and request an immediate refund of a total of $12 million euros, which had already been paid in advance of the season. However, today it was announced that Haas has responded to Uralkali and has rejected the Russian company's requests. What was Haas's response? Basically, the Americans affirm that they had every right to terminate the contract given the existence of a clause that comments that Uralkali does not ‘injure, bring into dispute, ridicule, or lessen the public reputation, goodwill of favourable image of Haas’. Likewise, Haas has argued its position as to why the money given by Uralkali should not be reimbursed, it states:

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

Despite having refused a refund request from Dmitry Mazepin's company, Haas claims the team is entitled to an extra pay for 'lost profits' which they believe would have been made had the deal not been finalized. This extra payment is about 8 million euros, which Haas is demanding and wants to receive in a matter of days.

In the sponsorship contract that had been signed between Haas and Uralkali, there was also a clause that commented that the Russian company has the right to receive a Formula 1 car of the 2021 season, however, Haas has refused to comply with it until Uralkali pays them the aforementioned 8 million euros. “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.”

It's a somewhat dramatic outcome for these two companies. Uralkali will have to respond to the requirements of the North American team, and of course they will try to negotiate, specifically not to meet the 8 million euros that Haas is requesting. For its part, Haas has been highly specific in what they want and says that for no reason will the money already provided by his former main sponsor be reimbursed.