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Russia’s refusal to pay damages in a court case has forced France to seize $700 million owed to Russia’s aerospace industry.
In total, France has seized Russian assets worth $1 billion following the Kremlin’s refusal to pay damages to former Yukos shareholders.
In July 2014, The Hague international arbitration court ruled that Russia must pay $50 billion for expropriating the assets of Yukos. The seized assets include $400 million owed by French-based satellite provider Eutelsat to the Russian Satellite Communications company and $300 million owned by French space launch provider Arianespace to Russia’s Roscosmos space agency, the magazine reported, citing the Shearman & Sterling legal firm which represents the Yukos shareholders.
This story is similar to the Sea Launch court suit by Boeing, whom the Russians owe $300 million. In that case Boeing has moved to block Russia from selling Sea Launch.
Both stories suggest that the Russians are in big financial trouble, partly caused by a lack of understanding of capitalism. In both cases, they formed partnerships with western businesses and failed to realize that those partnerships placed financial obligations upon them. From its Soviet days Russia probably thought they could ignore those obligations if it became inconvenient, and they are now discovering that this is not really possible if they wish to sell their goods to the rest of the world.
I expect Russia’s space industry to increasingly become isolated from the rest of the world market, partly because of these events.
In related news, Roscosmos has revealed that after the initial launch at Vostochny in April, the second launch will not occur until 2017. This indicates that the first launch is merely a face-saving effort to hide the fact that construction is really more than a year behind schedule, not three months.