F1 News: Haas Misses Payment To Former Sponsor Amid Legal Battle - 'Flagrant Violation of the Tribunal’s Award'

Alex Harrington | Jul 16, 2024

Nov 18, 2023; Las Vegas, Nevada, USA; Haas F1 driver Kevin Magnussen of Denmark (20) during the Las Vegas Grand Prix at Las Vegas Strip Circuit. Mandatory Credit: Gary A. Vasquez-USA TODAY Sports / Gary A. Vasquez-USA TODAY Sports

The Haas Formula 1 Team, an American outfit that has just confirmed an extension of its technical partnership with Ferrari, finds itself entangled in a legal dispute with its former sponsor, Uralkali, over allegations of unmet financial commitments and undelivered promises. At the heart of the conflict is a disagreement over payments and obligations that were supposed to be settled following the early termination of Uralkali's sponsorship, which was cut short by geopolitical tensions.

The partnership between Haas and the Russian chemical company Uralkali came to an end in the aftermath of Russia's invasion of Ukraine in March 2022. Following this, a Swiss arbitration court ruling in June 2024 found that Haas was right to terminate the sponsorship agreement without breaching the contract, negating the need for compensation for the termination itself. However, the court determined that Haas still owed Uralkali a refund of $9 million from the $13 million sponsorship fee, a sum adjusted for payments post-dated to the March 4, 2022, contract cancellation.

On top of this, Haas was ordered to hand over a 2021 Formula 1 car as was stipulated in their initial agreement.

Despite the clear directives from the arbitration court, Uralkali has accused Haas of failing to adhere to the ruling. The company alleges that Haas has neither refunded the remaining sponsorship money nor delivered the 2021 Formula 1 car as mandated.

"Regretfully, neither the money (plus interest plus costs) has been paid, nor the race car delivered by the required deadline. A letter sent by Uralkali to Haas in early July providing options for the delivery of the race car to take place went unanswered. Further interest on the awarded sum continues to accrue,” stated Uralkali, according to Motorsport.com.

An Uralkali representative doubled down on their frustration, equating Haas’s inaction to a breach of sportsmanship:

“Haas’ failure to execute the required transfers is a flagrant violation of the tribunal’s award as determined by an arbitration process signed on to by both sides. This gives new meaning to the expression ‘unsportsmanlike conduct.’ Uralkali will use all means provided for under the law to see that the ruling is implemented. Let all current and potential Haas sponsors be aware of the kind of treatment that may await them.”

With the North Carolina squad looking to regrow with newly appointed Ayao Komatsu as team chief, econonomic stability is something the team desperately needs as they continue to fight their way up through the midfield. Plus, with an entirely new driver roster expected next season, this sort of distress within its walls, plus the poor PR that this brings, could affect its buying power in the driver market.

With legal, financial, and reputational risks at play, the outcome of this battle could have substantial influence on the team.