France, Russia agree on warship compensation

PanARMENIAN.Net - France has agreed to pay compensation to Russia for cancelling the sale of two warships, a Russian official said, according to BBC News.

France stopped the sale after the outbreak of the conflict in eastern Ukraine, where Russia is accused of backing separatist rebels.

The Mistral contract was worth €1.2bn ($1.3bn). Russia made an advance payment of about €840mln. The first of two helicopter carriers - the Vladivostok - was supposed to be delivered to Russia in November 2014.

"The negotiations are completely finished, everything has already been decided, both the time-frame and the amount," said Vladimir Kozhin, an adviser to Russian President Vladimir Putin for military technology co-operation.

"I hope that in the very near future an agreement will be signed on breaking the contract, and then the sum that France will pay us will be announced," Kozhin was quoted as saying.

Sources close to the talks, quoted by Russia's Kommersant daily, say France will compensate Russia to the tune of €1.16bn.

That sum includes the amount that Russia has already spent on special training for 400 sailors, on port infrastructure in Vladivostok for the two warships and on developing four prototype Ка-52К helicopters.

The compensation deal was clinched last week at talks between Russian Deputy Prime Minister Dmitry Rogozin and French Defense Secretary-General Louis Gautier, Kommersant said.

The Mistral contract dates back to a June 2011 agreement reached under the previous French President, Nicolas Sarkozy.