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Ruling in Russia: Court orders VW to pay damages to former partner Gaz

Ruling in Russia: Court orders VW to pay damages to former partner Gaz
Ruling in Russia: Court orders VW to pay damages to former partner Gaz

VW actually put the Russia chapter behind it a long time ago. But a Russian court has sentenced the Wolfsburg-based company to pay millions in damages.

A Russian court has sentenced Volkswagen to pay millions in damages to its former partner Gaz. The court in Nizhny Novgorod on the Volga partially upheld a claim by Gaz on Tuesday and sentenced VW to pay 16.9 billion rubles (around 177 million euros), Europe’s largest carmaker confirmed in response to a request from the German Press Agency. “The judgment is not yet final and the reasons for the judgment are not yet available,” explained a company spokesperson. “We will examine and evaluate the reasons for the judgment in order to decide what further legal steps we will take.”

Gaz sued VW for damages in early 2023 after VW withdrew from Russia and terminated its cooperation with Gaz. Several models of the VW core brand and the Czech subsidiary Skoda were assembled at the Gaz factory in Nizhny Novgorod. After US sanctions against Gaz came into force in May 2022 because of the Russian war in Ukraine, Volkswagen withdrew from co-production and offered employees severance pay.

Production stop after attack on Ukraine

Production had already been stopped – as was the case at VW’s own plant in Kaluga, 150 kilometers southwest of Moscow. VW had already suspended production at its then two factories in Russia in March 2022 shortly after the attack on Ukraine. The export of vehicles to the giant country had also been stopped for all group brands.

VW then sold the Kaluga plant to the Avilon trading group in May 2023. According to Volkswagen, Gaz then withdrew one of its two claims for damages. The court in Nizhny Novgorod has now partially granted the remaining claim. Of the 28.5 billion rubles that Gaz had demanded, the company was awarded 16.9 billion. The court rejected all of Gaz’s other claims. During Soviet times, Gaz was known for building the Volga sedan, which was also used as taxis in the GDR.

Source: Stern

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