France says it cannot deliver Mistral warship to Russia over Ukraine

The Mistral-class helicopter carrier (Reuters/Stephane Mahe)
France has suspended delivery of the first of two Mistral helicopter carrier ships to Russia, due to events in eastern Ukraine.

“The situation is serious. Russia’s recent actions in the east of Ukraine contravene the fundamental principles of European security,” said a statement from the office of President Francois Hollande.

"The president of the Republic has concluded that despite the prospect of ceasefire, which has yet to be confirmed and put in place, the conditions under which France could authorise the delivery of the first helicopter carrier are not in place."

The office informed AFP that the suspension would be next reviewed before November.

"Legally, nothing has changed and the contract is still in force, and the first vessel is still due for delivery on November 1. But a political decision has been taken. The President is saying that if nothing changes, he cannot allow the delivery to go through," one of Hollande's representatives told Russia's RIA news agency.

As the rift over Ukraine has widened, Russian officials have repeatedly said that they would accept the French government’s failure to deliver the ships, as long as it paid the penalty for breaking the contract, which, could potentially exceed the cost of the ships themselves.

"This is not a tragedy, though of course the news is unpleasant. It will not affect our armament plans. We will act in accordance with international laws and the statutes of the contract," said Russian Deputy Defense Minister Yuri Borisov, in a statement.

The two ships were commissioned by Russia in 2011 at a cost of $1.6 billion. The first of these, the Vladivostok, was due to come into service at the end of this year, with the second, the Sevastopol, due to be completed in 2015.

France’s suspension does not fall under the sectoral sanctions the EU and the US imposed upon Russia for purported meddling in the armed conflict in eastern Ukraine, introduced last month. That raft of sanctions did not cover deals signed before their imposition.

But it could be covered under new sanctions sanctions the EU is expected to introduce this week, which may earn France a temporary reprieve from compensation under the terms of the contract.

While Moscow officials earlier admitted that in terms of efficiency and versatility the cutting-edge Mistral has no equivalent in the Russian Navy, the deal was always considered controversial, as France was a Cold War adversary, and is a founding member of NATO.

Indeed, there had been speculation of NATO taking over the Mistral order from Russia, following a proposal from a group of US congressmen back in May. Earlier this week, the Alliance chief Anders Fogh Rasmussen did not rule out the possibility, but said that it “remains a national decision, not for NATO to interfere.” In the aftermath of the announcement from Hollande, NATO maintained that it wasn't forcing France to suspend the sale.

Previously US President Barack Obama said France should “press the pause button” on the deal, while fighting in Ukraine is in progress.

Previously, French officials resisted, citing concerns over reputational damage, and saying that the financial penalties might hurt Paris more than Moscow. Even if France does now decide to sell the ships to someone else, it will have to refit them, as every aspect, from the helicopter pads to hull alloys is custom-made to Russian specifications.