France and Russia terminate Mistral-class aircraft carrier contract


France and Russia have reportedly agreed to terminate a €1.2bn ($1.3bn) contract to deliver two Mistral-class aircraft carriers for the Russian Navy.

According to a joint statement from both countries, France will fully reimburse the money that was already paid for the vessels and also return Russian equipment that had been installed on the vessels.

A statement from the Kremlin was cited by The Wall Street Journal that said both countries came to a mutual understanding regarding the compensation of the Russian side for funds paid under the contract.

"Both countries came to a mutual understanding regarding the compensation of the Russian side for funds paid under the contract."

In November last year, France suspended the delivery of the first Mistral-class aircraft carrier, Vladivostok, amid pressure from its allies over Ukraine crisis.

Western allies argued that the delivery of these France-built vessels would significantly strengthen Russian navy's capability to attack and hold coastlines, the WSJ reported.

The first carrier, Vladivostok, was scheduled to join the Russian Navy by the end of 2014, followed by Sevastopol this year.

In June, France shipbuilder, DCNS and Russian defence export agency, Rosoboronexport signed this $1.7bn deal for the supply of two Mistral / BPC-type force projection and command vessels.

The warships, which are capable of cruising at a maximum speed of 19k, incorporate an MRR-3D NG surveillance radar and a high-performance communications suite for humanitarian operations and several other missions.

In April, during an annual televised call-in show, Russian President Vladimir Putin has said that the country will not impose penalties or fines against France over its decision to suspend the delivery of the vessels.

Meanwhile, France said the country is planning to find another buyer for the ships.