Russian Railways (RZD) attempts to recover penalty from Siemens

RZD is seeking compensation for the breach of contract in the delivery of “Sapsan” trains

A court in Russia has ruled in favor of RZD, allowing them to claim a penalty of 6 million rubles per day from Siemens for the non-performance of the contract, according to the railway journal Railway Supply, citing Rollingstock.

Previously, the carrier had appealed to the Arbitration Court of Moscow, requesting a penalty of 29.6 million rubles (6 million rubles for non-performance of the contract, and the remaining amount as compensation for losses related to the lack of supply of rolling stock).

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According to “RIA Novosti,” a representative from Siemens stated during the court session that the company is unable to fulfill its obligations under the contract due to the possibility of criminal prosecution.

He also deemed the amount of the penalty excessive and mentioned that if it were imposed, the plaintiff would receive an amount equal to the annual profit for 2021.

The Siemens representative requested the dismissal of the claims, citing that the contract is governed by German legislation.

The court, in turn, pointed out that the defendant did not have the right to unilaterally terminate the contract since “the sanction legislation of the United States and the EU contradicts public order and should not be applied on Russian territory.”

Additionally, the court noted that restrictive measures cannot be applied to contracts that have already been fulfilled, according to clarifications from the EU.

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