FT: Arizona company fails to fulfil $1 billion Ukraine ammunition deal

An Arizona-based company, OTL Firearms, which signed a nearly $1 billion contract to supply ammunition to Ukraine, failed to fulfil its obligations and has now been ordered to return the advance payment along with legal costs.

The deal, concluded in 2022 between OTL Firearms and Ukraine’s state-owned arms trader Progress, covered a large shipment of Soviet-made ammunition, including around 10 million 23 mm anti-aircraft rounds, tens of thousands of Grad rockets, as well as mortars and other weapon types, Caliber.Az reports, citing Financial Times.

Ukraine paid the company an advance of €17 million, but no deliveries were made.

Court documents show that the Tucson-based retailer — a small gun shop with no export experience, storage capacity, or state-scale logistics — was incorporated only in 2020.

The company later cited issues with export licences and political restrictions in Serbia, where the ammunition was allegedly sourced.

A US federal court in Arizona upheld a Vienna arbitration ruling ordering the firm to repay Ukraine’s advance, plus interest and legal fees, bringing the total repayment to more than €20 million.

The ruling marks the first legal consequence of one of the most unusual arms procurement efforts of the Ukraine war, offering a rare glimpse into the chaotic world of wartime logistics.

By Jeyhun Aghazada