From what has been reported, it was a 3 year contract to the end of 2016 with Volvo retaining ownership of the cars and engines. Reality is that none of us are privy to the details of the contract and it will be up for the courts to interpret. Anybody stating this or that will happen is just speculating.
V8SC require a manufacturer to sanction its product to be raced. If this is not forthcoming, then the S60 will not be eligible for competition, as stated on page 15 of the 2017 Silly Season thread re Mercedes-Benz sanctioning Erebus' E63 program.
Mercedes adds star power to V8 Supercars (Sydney Morning Herald) stating "...Mercedes-Benz Australia, which reversed its earlier decision not to allow the scheme to go ahead..."