Wednesday, March 9, 2022
Russia, Ukraine, and Contracts
Over on the Twitter, @HoffProf (David Hoffman) and @nate_oman (Nate Oman) have started an important conversation about corporations severing their ties, including contractual ties, with Russia, Russian entities, and Russian nationals in protest of the Russian invasion of Ukraine. That may be a theme that we will explore at greater length in this space in the coming weeks and months. Here's a foretaste.
Over the weekend, the Haas Formula 1 team announced that it had terminated its contract with one of its drivers, Nikita Mazepin, and its sponsor Uralkali. The double whammy is not entirely surprising, given that Nikita Mazepin is the son of the principal behind Uralkali, Dmitry Mazepin, a close ally of Russian President Vladimir Putin. Under new rules promulgated by the sport's governing body, Russian and Belarusian drivers can continue to compete under neutral flags so long as they express no support for the Russian invasion of Ukraine. The sport also terminated a deal to hold a race in Russia, and there are no plans to hold such a race in the foreseeable future.
As reported here, Uralkali responded with a suit against Haas, demanding full reimbursement of its sponsorship funding. Uralkali's public statement reads in part:
As most of the sponsorship funding for the 2022 season has already been transferred to Haas and given that 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 amounts received by Haas.
The refund from Haas and the remaining part of Uralkali's sponsor financing for 2022 will be used to establish the We Compete As One athlete support foundation.
Nikita Mazepin announced that he was establishing the We Compete As One Foundation to support athletes who are punished based on the passport they hold.