The end of the stalled F126 frigate project has legal repercussions: After the project was canceled due to delays, cost increases and legal risks, the Dutch shipyard commissioned by Damen wants to assert claims worth billions against the German Ministry of Defense, as their lawyer Peter Gauweiler wrote to specialist politicians in the Bundestag and Defense Minister Boris Pistorius (SPD). The “Bild” and the “Süddeutsche Zeitung” reported on it. The letters were available to the German Press Agency.
Pistorius decided to end the project in June. The Dutch company Damen Schelde Naval Shipbuilding (DSNS), initially commissioned as general contractor, was unable to meet the time and financial constraints, the ministry announced at the time. The first frigate with a so-called initial capability was originally supposed to have been delivered in mid-2028, the following ships by 2033. This was recently considered unrealistic.
Gauweiler, who is also known as a former CSU politician, wrote to the members of the budget and defense committees that Damen was asserting payment and indemnity claims against the Federal Republic of around 4.7 billion euros (4,679,663,394.00 net) due to breach of contract.
“These are not non-contractual claims for damages, but initially exclusively claims contractually agreed between the Federal Republic of Germany and DAMEN,” continued Gauweiler.
And: "Possible additional claims for damages beyond this are currently being examined, as our client has suffered considerable damage in various respects as a result of the Federal Minister's legally completely unfounded decision."
Did the arms procurers hold on to the project for too long?
It is further argued that "the public contracting authority confirmed the project in June 2024 by exercising the contractually agreed option to order two additional frigates in the knowledge of the project delays that had already occurred and the objective delay risks communicated in January 2024" - and thus increased the original contract value from 4.5 billion to 6.5 billion euros.
It is emphasized that at the time of exercising the option (“Ships 5 and 6”) in June 2024, the client “demonstrably already had positive knowledge that the original schedule could not be met, to which he had also contributed”.
Gauweiler also wrote a letter to the minister's office on September 22nd and in it he also took aim at Pistorius personally: "First of all, however, we have to address the fact that in the course of the interim examination, the suspicion that the political leadership of the BMVg has acted contrary to their official duties has increased considerably."
Pistorius pulled the plug on the billion-dollar arms project in June after extensive reviews. IT problems with the Dutch design software were cited as one reason.
Then the price increases: Initially, the costs for six F126 frigates were said to have totaled around 10 billion euros. When it was awarded, the F126 was the largest naval order of its kind in the history of the Bundeswehr. According to the ministry, if the project were to continue, it was determined that the total financial requirement would then rise to more than 18 billion euros.
Pistorius already spoke of a “prophylactic counterattack”
The defense minister sees a move. He had already sharply rejected the accusation of a breach of the law at the end of the billion-dollar frigate project. Statements on behalf of the Dutch Damen Werft were a “prophylactic counterattack in advance of any further development,” said the minister in Berlin in July.
Without wanting to prejudge proceedings that have not yet begun, “it is also publicly known that the Damen Werft knows that there could be claims for damages amounting to 2.3 billion euros on our part,” said Pistorius.
“It is initially legitimate for a company to defend itself against an order being cancelled. “But the basis for this is poor performance on the part of the contractor, and everyone involved knows that,” said Pistorius. And: “To be honest, I’m calm about it. In the end, the lawyers will examine this.” The Ministry of Defense “considered very carefully why we are doing this and that we have to do it in order to prevent further damage to the taxpayer.”
