Dutch shipbuilder Damen Shipyards Group is seeking compensation from the government for the damage caused by sanctions on Russia. These sanctions have prevented the company from fulfilling several contracts. The ongoing legal battle began in May when Damen filed a lawsuit at the district court in Rotterdam. This information was revealed by Bloomberg on Tuesday and later confirmed by company spokesman Rick van de Weg.
Damen Shipyards Group is a 90-year-old family-owned business based in Gorinchem, Netherlands. The company specializes in building various types of vessels, including warships and luxury yachts. Just before the hostilities in Ukraine erupted in February of last year, Damen delivered a dredger to Russia for duty in the Arctic.
The sanctions imposed by the European Union in retaliation for the conflict in Ukraine have banned most business transactions with Russia. As a result, Damen has been unable to fulfill its obligations under several contracts and has suspended its engineering branch in the country.
The Western sanctions were intended to cripple the Russian economy and force Moscow to concede defeat in Ukraine. However, they have not been as efficient as their architects had hoped. The G7 oil price cap, which aimed to force Russia to sell crude at or below $60 per barrel, is not working effectively. US Treasury Secretary Janet Yellen admitted last week that the mechanism is not achieving its intended outcome. Russian Deputy Prime Minister Aleksandr Novak also noted that the impossibility of enforcing the price cap was apparent to Moscow from the start.
In addition to the oil price cap, the EU’s decision to decouple from cheap Russian gas has affected the competitiveness of its heavy industries. This move has led to the shutdown of energy-intensive manufacturing in some cases. However, it appears that Germany is still consuming natural gas from Russia. The CEO of Uniper, a German wholesaler, explained that they buy liquefied natural gas in the open market and cannot be certain where it originates from.
Damen Shipyards Group’s request for compensation reflects the challenges faced by companies affected by the Russia-related sanctions. The economic consequences and disruptions to business operations have had a significant impact. As the legal battle continues, it remains to be seen how the government will respond to Damen’s claim for compensation.
It is noteworthy that the effectiveness of the Western sanctions on Russia has come into question. The intended outcomes, such as forcing Russia to sell crude oil at a specific price, have not materialized fully. This raises concerns about the long-term effectiveness and impact of such measures on both the Russian and Western economies.
As the sanctions persist, businesses like Damen Shipyards Group continue to face obstacles and seek compensation for the damages incurred. The outcome of this legal battle may have broader implications for other companies affected by sanctions and the relationship between the Dutch government and businesses impacted by geopolitical conflicts.
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