France, Russia Reach Agreement to Break Mistral Warship Contract

France has reimbursed the money Russia advanced for the Mistral-class warships and will return Russian equipment that had been installed, leaving France free to use or sell the vessels as it sees fit, according to a joint statement from both countries on Wednesday.

“This matter is now closed,” they said in the joint statement.

The sale, signed by former President Nicolas Sarkozy in 2011 during a period of warming relations with Russia, became a policy dilemma for President Francois Hollande after France and its allies imposed sanctions on Russia in early 2014 for its actions in Ukraine.

Hollande initially announced France was simply delaying delivery of the first ship, due at the end of last year, later saying he was seeking to terminate the contract. The ships are sitting in a naval dockyard in Saint-Nazaire on France’s Atlantic coast.

Hollande and Russian President Vladimir Putin spoke by telephone on Wednesday to seal the agreement, the French leader’s office said. Putin said on April 16 that Russia wouldn’t demand payment of penalties for non-fulfillment of the contract.

The 199-meter (653-foot) warships are noted for their versatility, and can be quickly converted from helicopter carriers to hospital ships to control-and-command vessels. The ships built for Russia were named Vladivostok and Sevastopol.

About 400 Russian sailors trained on one of the ships late last year.