Russian court freezes Volkswagen assets in Russia, Auto News, ET Auto

Russian court freezes Volkswagen assets in Russia, Auto News, ET Auto

A Russian court has put a freeze on Volkswagen’s assets in the country, amid a lawsuit by a local car dealership.

A Moscow court has ordered Volkswagen to freeze its assets in Russia, in response to a lawsuit by a local car dealership, according to reports. The dealership, Torgoviy Dom Avtomobil, has alleged that the German automaker failed to pay back debts totaling 6.1 billion rubles (approximately $100 million USD).

The lawsuit was filed in July 2019, with Torgoviy Dom Avtomobil alleging that Volkswagen had breached contractual obligations and failed to pay back the owed debt. Volkswagen has disputed the allegations, arguing that the debts have already been settled.

The court has granted the motion for the asset freeze, covering all of Volkswagen’s assets in Russia. This includes its factories, offices, and warehouses, as well as its vehicles, spare parts, and raw materials. This freeze applies to Volkswagen’s subsidiaries, including Audi and Skoda, which operate in Russia.

The asset freeze will remain in place until the court rules on the case. If Volkswagen is found responsible for the alleged breach, it could face financial penalties.

The case is the latest legal issue to befall Volkswagen in Russia. Last year, the automaker was fined $1.2 million USD for failing to meet emissions standards. And in 2017, it was fined $7.5 million USD for price fixing.

Volkswagen is one of the leading carmakers in Russia, with its vehicles making up a significant portion of the market. The asset freeze could have a significant impact on the automaker’s ability to conduct business in the country.