(Source: Defense-Aerospace.com; posted Dec. 06, 2019)
With 90 undelivered HX81 trucks left in limbo by Berlin’s sudden freeze on military equipment deliveries to Saudi Arabia, Rheinmetall sued and this week an administrative court in Frankfurt overturned the ban. (Rheinmetall photo)
The winner in the courtroom was Rheinmetall Military Vehicles GmbH, a subsidiary of the Rheinmetall Group, which had sued Berlin because the bulk of a major contract with Saudi Arabia was ‘sabotaged’ by a poorly reasoned decision by the federal government. Since then, 90 out of 110 HX81 heavy duty trucks ordered by Saudi Arabia have since been sitting uselessly in a parking lot.
In November 2016, Rheinmetall announced a major order from a foreign customer. "The order includes 110 logistics vehicles valued at 134 million euros to be delivered between January 2018 and February 2019," the company said at the time. Follow-on orders were expected, and well as maintenance and logistics services for five years.
In 2016, the Federal Government granted Rheinmetall the export license for the trucks, and the company delivered an initial batch of 20 trucks to the Royal Saudi Land Forces.
Murder of Khashoggi halts business
On October 2, 2018, however, cooperation with Saudi Arabia became much more difficult. The well-known journalist and critic Jamal Khashoggi was killed in the Saudi Arabian Consulate in Istanbul. Saudi Arabia later admitted killing and arrested alleged perpetrators.
Rheinmetall claims its HX series of heavy military trucks sets a new yardstick in lifecycle costs and total cost of ownership; they are true tactical trucks with low maintenance costs because they use modified commercial components.
The outcry over the murder sounded worldwide and, in Germany, the Federal Government quickly reacted: all export licenses for military equipment were "provisionally suspended," including those for the 90 Rheinmetall military trucks still to be delivered.
The export stop runs until March 2020, and no one can say whether it will be extended again. If the federal government simply revoked its export license, Rheinmetall could at least sue for damages or talk to its insurance company once. By the stopover, the company was damned to wait.
The trial was headed by the President of the Administrative Court, Rainald Gerster. The court found it difficult to understand why the killing of Khashoggi should even constitute a turning point. "Saudi Arabia was a troubled state, is a troubled state, and will always remain a troubled state," said Gerster. Nevertheless, the federal government had granted the approval for the military trucks.
Export ban suspended due to formal errors
Consequently, the Frankfurt Administrative Court abrogated the "de facto export ban because of formal errors", Handelsblatt reported, adding that the court notably found "reasoning deficits" in the government’s case.
The verdict is administrative slap and political disgrace at the same time. It is still not final, but it is not every day that a local administrative court slams the Federal Government for making beginner’s mistakes in internationally meaningful decisions.
Click here for the original story, in German, on the Handelsblatt website.
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