Russia warns France over cancellation of arms deal

Russian government has said that it will seek damages from France in case their deal for Mistral helicopter carriers was cancelled.

"The Russian side will unconditionally stand for its rights in line with the deals signed and demand to repay all losses incurred by cancellation of the contract on Mistral," Xinhua quoted deputy Defence Minister Yuri Borisov as telling media.

"I hope the French side will balance everything and make a correct decision."

France risks undermining its credibility as an international business partner if the contract to build two Mistral ships is not executed, he added

On Monday, French Foreign Minister Laurent Fabius said a possible annulment of the contract was among the sanctions against Russia over its Crimea annexation.

Paris might take this step in the event of further escalation of the situation in Ukraine, he said.

Russia signed a $1.58-billion deal with a French shipyard in 2011 for two Mistral-class ships, the first one is due for delivery in 2014 and the second in 2015.

The Mistral-class ship is capable of carrying 16 helicopters, four landing vessels, 70 armored vehicles and 450 personnel.