Following the cancellation of a 10-billion-euro defense shipbuilding project, the Dutch shipbuilding group Damen Shipyards has filed a massive claim against the German government.
Reuters reports that the Budget Committee and the Defense Committee of the German Bundestag have received a letter from the law firm Gauweiler stating that Damen Shipyards, the prime contractor for Germany’s F126 frigate program—which was terminated several months ago—will file a claim of approximately 4.7 billion euros (about $5.274 billion) against the German government.
The letter specifies that the claim amount includes payments due under the contract as well as compensation for what Damen Shipyards deems to be a breach of contract by the German government; Damen Shipyards is also evaluating the possibility of seeking additional damages.
Damens Shipyards believes that the German government itself is responsible for the delays in the German F126 frigate program. The letter states: “Despite being fully aware of the project’s delays, the German government exercised its option to purchase two additional frigates of the same class in June 2024. However, two years later, Germany’s unilateral cancellation of the construction contract caught Damens Shipyards completely off guard; this decision to cancel the order was based purely on political considerations.”
In June of this year, the German Ministry of Defense terminated the contract with Damen Shipyards for the construction of the F126 frigate project, citing “significant delays, massive cost overruns, and unforeseen risks,” thereby officially ending this troubled defense shipbuilding project.
The F126 frigate program consists of a total of six ships, with an estimated cost of approximately 10 billion euros (approximately $11.221 billion at current exchange rates). The shipbuilding contract was signed in 2020, making it Germany’s largest defense shipbuilding project at the time.
According to information disclosed by German officials, Germany has spent more than 2 billion euros on the F126 frigate program since signing the construction contract with Damen Shipyards in 2020. However, the project has not progressed smoothly; due to challenges in integrating Product Lifecycle Management (PLM) engineering software, Damen Shipyards—the general contractor—has been unable to share design and production data while hull sections are being built at various shipyards.
This issue prevented Damen Shipyards from meeting the agreed-upon construction milestones for the F126 frigate project on schedule, resulting in project delays and rising costs; the German side had previously cited this as grounds for suspending project payments. According to data released in September 2025, the German government had frozen 671 million euros in payments for the frigate project at that time.
Despite numerous problems, Germany had not yet completely abandoned the F126 frigate project, into which it had invested enormous effort, and planned to try to salvage the project by replacing the original prime contractor—namely, by having German defense giant Rheinmetall take over construction. Rheinmetall had publicly expressed its intention to take over the project for 12.8 billion euros.
However, given the multiple pressures—including engineering software issues, schedule delays, soaring costs, and postponed delivery dates—Germany ultimately decided to cut its losses and terminate the F126 frigate project.
When terminating the project, the German Ministry of Defense stated: “If the project were to continue, the total cost would soar from the initially projected approximately 10 billion euros to over 18 billion euros—an increase of about 80 percent.” In terms of delivery schedules, even if Rheinmetall were to take over construction, the first ship would not be delivered until 2032 at the earliest—a significant deviation from the originally planned delivery schedule.
Although the F126 frigate program has been terminated, Germany has not abandoned its frigate construction plans and has instead turned to the German naval shipbuilder TKMS to order eight MEKO A-200 frigates, with a total value of approximately 11.6 billion euros. The order for these frigates was placed in two batches. The first batch of four vessels was approved by the German Bundestag’s Budget Committee in July 2026, with delivery expected to begin in 2029; the follow-on order for the remaining four vessels was approved on October 8, 2026, and all vessels are expected to be completed and delivered by 2035.
In terms of delivery schedules, the MEKO A-200 frigate—a mature design already procured by several nations—is expected to begin arriving for the German Navy in 2029, three years ahead of the 2032 delivery date previously indicated by Rheinmetall.
It is worth noting that Germany’s initial order for the MEKO A-200 was intended to expedite the replacement of the troubled F126 frigate program; however, with the approval of follow-on orders, the project has since evolved into one of the primary initiatives for the German Navy’s surface fleet.