France should either fulfill its contract obligations under a June 2011 contract to deliver two Mistral-class warships to the Russian Navy or return the money, a Russian deputy prime minister said Wednesday.
French Foreign Minister Laurent Fabius said Monday that Paris will consider canceling the 1.2-billion-euro ($1.7 billion) deal if Moscow provokes further escalation in Ukraine.
The remarks came after the U.S. and European Union imposed sanctions on senior Russian officials following a referendum in Ukraine's Crimea in which voters overwhelmingly supported secession and reunification with Russia.
"Either stick to your contract obligations and deliver the warships in time, or return the money and parts of these warships' hulls, assembled at our Baltiysky Zavod [shipyard]," said Dmitry Rogozin, a deputy prime minister in charge of the defense industry.
A source in Russia's United Shipbuilding Corporation told RIA Novosti on the condition of anonymity that France will also have to pay huge penalties if it chooses to unilaterally terminate the contract.
Under a June 2011 contract signed between Russia and France, the first French Mistral-class amphibious assault ship, named Vladivostok, will be delivered to Russia by the year-end, while the second warship, the Sevastopol, is due to arrive in 2015.
The ships are capable of carrying 16 helicopters, four landing craft, 70 armored vehicles, and 450 soldiers and are expected to be deployed with Russia's Pacific Fleet.