WORLD NEWS TOMORROW | WNT NEWS; Russian officials fear an Iranian lawsuit for a cancelled missile delivery deal may prove successful, according to sources in the government, Kommersant reported on Wednesday.
The legal claim submitted to an arbitration court in Geneva is to make Moscow either supply the S-300 surface-to-air missile complexes or pay nearly $4 billion of compensation.
“Unfortunately, we have no reason to believe that the court will take into account all the niceties of the current complicated situation over Iran,” an official admitted to the daily on condition of anonymity.
UN Security Council resolution
The contract for five missile complexes worth $800 million with the Russian arms exporter, Rosoboronexport, was cancelled back in 2010, when then-President Dmitry Medvedev ordered supplies of arms to Iran to stop.
The decision was due to implementation of a UN Security Council resolution passed earlier that year, and Russia is going to use this fact in court, Kommersant reported.
The Iranian Defense Ministry and state-run Aerospace Industries Organization, which filed the lawsuit in April 2011, are going to argue that supplying surface-to-air missile complexes has not been restricted by the council.
Russia has already returned the advance payment of $167 million, but Iran is hoping to get extra cash to compensate for losses or see the missile complexes delivered. The governmental official said this lawsuit was “unpleasant” and called Iranians “ungrateful,” given the stance Russia has taken in talks over the country’s nuclear program.
Paying up for the past
The compensation demanded by Iran, equal to nearly one-third of Rosoboronexport’s total revenue in 2011, includes the value of the contract, expenses for the complexes’ installation and moral damages, according to Kommersant’s sources on the arms market.
But the $4 billion is also to pay for problems with arms supplies in the past, according to Rajab Safarov, director at the Center for Modern Iranian Studies.
Teheran added penalties for other contracts with Russia which have not been fulfilled because of an agreement from 1995, endorsed by then-U.S. Vice President Al Gore and then-Russian Prime Minister Viktor Chernomyrdin, which banned Russia from exporting regular arms to Iran.
“Military and technical cooperation between the Russian Federation and Iran was in fact frozen,” Safarov told Kommersant. Moscow officially withdrew from the contract only in 2000.