Netherlands sued for stopping ship deliveries to Russia

The largest Dutch shipbuilder is seeking compensation from the government for damage caused by the sanctions on Russia, which have prevented it from honoring a number of contracts.

The ongoing legal battle, which started in May with a suit filed by Damen Shipyards Group at the district court in Rotterdam, was revealed by Bloomberg on Tuesday. Company spokesman Rick van de Weg later confirmed the pending proceedings to other media outlets. 

Damen is a 90-year-old Gorinchem-based family-owned business which builds various types of vessels, from warships to luxury yachts. Days before the hostilities in Ukraine erupted in February last year, the company delivered a dredger to Russia for duty in the Arctic, according to Bloomberg.

Sanctions banning most business transactions with Russia, which the EU imposed in retaliation for the conflict, have prevented Damen from fulfilling its obligations under several contracts. It has also suspended its engineering branch in the country.

The Western sanctions supposed to cripple the Russian economy and force Moscow to concede defeat in Ukraine have not been as efficient as their architects had hoped.

The G7 oil price cap, a mechanism intended to force Russia to sell crude at or below $60 per barrel, does not appear to be working, US Treasury Secretary Janet Yellen admitted last week. Russian Deputy Prime Minister Aleksandr Novak stated on Tuesday that the impossibility of enforcing the price cap was apparent to Moscow from the start.

The EU’s decision to decouple from cheap Russian gas undermined the competitiveness of its heavy industries, in some cases forcing energy-intensive manufacturing to shut down.

Nevertheless, Germany is likely still consuming natural gas originating in Russia, Uniper CEO Michael Lewis said last week. The German wholesaler buys liquified natural gas in the open market and cannot be certain about where it comes from, he explained.

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