Russian court seizes VW's assets after lawsuit by ex-business partner

A court in Nizhny Novgorod in Russia has seized the assets of Volkswagen (VW) in Russia following a lawsuit filed by the German carmaker's former Russian partner, Gaz.

Gaz asked the court to declare the termination of an assembly contract by VW null and void and to order VW to pay a penalty of 15.6 billion rubles ($201 million), the Interfax news agency reported on Monday, citing court documents.

The Russian carmaker Gaz, known in Soviet times for producing the Volga sedans, was VW's manufacturing partner in Russia until last year. Several VW and Skoda models were bolted together at the factory in Nizhny Novgorod on the Volga River.

After the US sanctions against Gaz came into force in May, VW officially withdrew from the co-production and offered the employees there severance pay.

Production at the Gaz plant as well as at VW's own facility in Kaluga, 150 kilometres south of Moscow, was stopped shortly after the Russian invasion of Ukraine in February 2022.

The German carmaker's plans to sell its plant and other assets in Russia have recently become known. The car dealer group Avilon was considered a possible buyer. However, such deals have to be approved by the Russian government.