Legal Risks in Foreign Trade & International Supply in Russia

 

April 30, 2024

BRACE Law Firm ©

 

The supply of goods often involves risks for both parties to a foreign trade contract. These risks may relate to the possibility of delayed performance or the outright failure to perform supply obligations.

The current global political and economic climate has forced the termination of some foreign trade contracts due to reasons beyond the parties' control. Consequently, when entering into a foreign trade contract, parties must consider not only standard risks associated with the cross-border delivery of goods from seller to buyer but also risks independent of the parties to the international agreement.

The fundamental document in the international regulation of the supply of goods is the United Nations Convention on Contracts for the International Sale of Goods [1] (the "Vienna Convention" or the "CISG"), which applies to contracts for the sale of goods between parties whose places of business are in different states. Importantly, the Vienna Convention does not apply to the sale of goods acquired for personal, family, or household use.

Within the framework of the Vienna Convention, the passing of risk is covered in Chapter IV, which establishes the basic provisions regarding risk in the sale of goods:

• Loss of or damage to the goods [2] does not discharge the buyer from the obligation to pay the price; [3]
• In the carriage of goods, risk passes to the buyer when the goods are handed over to the first carrier; [4] however, risk does not pass to the buyer until the goods are clearly identified for the purposes of the contract by marking, shipping documents, or notice sent to the buyer; [5]
• The buyer assumes risk regarding goods sold while in transit[6] from the time the goods are handed over to the carrier who issued the documents embodying the contract of carriage, [7] etc.

A similar rule exists in Russian civil legislation. Specifically, a significant change in the circumstances from which the parties proceeded when entering into a contract constitutes grounds for its modification or termination, unless otherwise provided by the contract or follows from its essence. A change in circumstances is recognized as significant when they have changed to such an extent that, if the parties could have reasonably foreseen it, they would not have entered into the contract at all or would have done so on significantly different terms. [8]

Despite the regulation of this issue in national and international legislation, the current political situation has significantly affected the performance of foreign trade contracts.

Foreign Companies' Refusal to Perform Contracts

A foreign trade contract, like most transactions, imposes certain obligations on the parties, which they undertake and endeavor to perform within established deadlines. However, political and economic events both domestically and globally have adjusted the relationships between foreign trade participants, forcing parties to foreign trade transactions to abandon concluded agreements.

Despite the possibility of terminating a foreign trade contract, most foreign trade participants found themselves in a difficult position due to the introduction of sanctions and the impossibility of performance as provided for by Russian civil legislation—specifically Article 416 of the Civil Code of the Russian Federation (the "Civil Code"). This article states that an obligation terminates upon the impossibility of performance if such impossibility is caused by a circumstance arising after the obligation was created for which neither party is responsible. Under this article, impossibility of performance is objective when, due to circumstances beyond the debtor's will or actions, the debtor lacks the ability to perform the obligation either personally or by involving third parties in accordance with the law or the contract.[9]

Force majeure refers to extraordinary, unforeseen, and unavoidable circumstances arising during the performance of contractual obligations that could not have been reasonably expected at the time of contracting, or avoided or overcome, and which are beyond the control of the parties. Specifically, such circumstances include, among others, the adoption of international sanctions and other circumstances independent of the parties' will. To confirm such circumstances, one must obtain a force majeure certificate, which is a document issued by the TPP of Russia evidencing circumstances of force majeure.[10]

It is also important to note that a certificate of force majeure issued by an authorized chamber of commerce and industry does not automatically mean a court will recognize the circumstances as such. Classifying any events as force majeure and assessing their impact on the possibility of performing an obligation falls within the competence of the court, which decides this issue based on the specific circumstances of the case.[11]

In most cases, the refusal of foreign companies to perform contracts necessitated the termination of already concluded foreign trade transactions. Under the Vienna Convention, the consequences of termination are established in Section V, according to which:

• Termination of the contract releases both parties from their obligations under it, subject to any damages which may be due; [12] a party who has performed the contract may claim restitution from the other party of whatever the first party has supplied or paid under the contract; [13]
• If it is impossible for the buyer to make restitution of the goods [14] in substantially the condition in which they were received, the buyer loses the right to declare the contract avoided or to require the seller to deliver substitute goods; [15] however, this rule does not apply:

• If the impossibility of making restitution of the goods or of making restitution of the goods in substantially the condition in which they were received is not due to the buyer's act or omission;
• If the goods or part of them have perished or deteriorated as a result of the examination;
• If the goods or part of them have been sold in the normal course of business or have been consumed or transformed by the buyer in the course of normal use before the buyer discovered or ought to have discovered the lack of conformity.

Failure to Meet Delivery Deadlines and Payment for Goods/Works/Services by Foreign Counterparties

A seller's obligation to perform its duties regarding the delivery of goods [16] often has a limited timeframe. Under the rules of the Vienna Convention, the seller must deliver the goods:

• If a date is fixed by or determinable from the contract — on that date;
• If a period of time is fixed by or determinable from the contract — at any time within that period unless circumstances indicate that the buyer is to choose a date;
• In any other case — within a reasonable time after the conclusion of the contract.

According to Russian law, the period for the seller to perform the obligation to transfer goods to the buyer is determined by the sales contract, and if the contract does not allow for such determination, in accordance with the prescribed rules. [17]

• As compensation, if there is a delay in the payment of the price or any other sum, the other party may exercise the right to interest[18] on the overdue amount without prejudice to any claim for damages recoverable under Article 74 of the Vienna Convention.[19]

Given that the moment of delivery is crucial for the performance of contractual obligations — and in the event of non-performance, for calculating claims — it is important to define the exact delivery period when concluding a foreign trade contract to exclude misunderstandings between the parties on this point.

Violations Regarding Product Quality, Completeness, or Quantity

Quality is one of the material terms of a foreign trade transaction, and the delivery of goods that conform to the terms of the contract and the quality requirements for such goods is the seller's obligation. However, situations frequently arise where goods are delivered, but their quality does not meet the requirements or they are unfit for use.

The Vienna Convention provides that goods do not conform with the contract[20] if they:

• Are unfit for the purposes for which goods of the same description would ordinarily be used;
• Are unfit for any particular purpose expressly or impliedly made known to the seller at the time of the conclusion of the contract, except where the circumstances show that the buyer did not rely, or that it was unreasonable for the buyer to rely, on the seller's skill and judgment;
• Do not possess the qualities of goods which the seller has held out to the buyer as a sample or model;
• Are not contained or packaged in the manner usual for such goods or, where there is no such manner, in a manner adequate to preserve and protect the goods.

The Vienna Convention also establishes that the seller is liable:

• For any lack of conformity which exists at the time when the risk passes to the buyer, even though the lack of conformity becomes apparent only after that time;
• For any lack of conformity which occurs after the time when the risk passes and which is due to a breach of any of the seller's obligations, including a breach of any guarantee that for a period of time the goods will remain fit for their ordinary purpose or for some particular purpose or will retain specified qualities or characteristics. [21]

In addition to international law, one must also consider Russian legislation regarding the quality of supplied goods. Under Russian law, the seller must transfer to the buyer goods whose quality conforms to the sales contract. In the absence of quality terms in the contract, the seller must transfer goods fit for the purposes for which goods of that kind are ordinarily used. [22]

The seller must comply with all quality requirements during delivery, as poor-quality goods cannot be used for their intended purpose and can lead to losses for the buyer.

Furthermore, damages [23] for breach of contract by one party consist of a sum equal to the loss, including lost profits, suffered by the other party as a consequence of the breach. Such damages may not exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract, in the light of the facts and matters of which they then knew or ought to have known, as a possible consequence of the breach of contract. [24]

Non-payment for Supplied Goods/Services/Works

Payment for goods is the buyer's primary obligation after acceptance. This rule is provided not only by the Vienna Convention, which stipulates that the buyer must pay the price for the goods and take delivery of them [25] as required by the contract, [26] but also by national legislation, under which contract performance is paid for at the price established by the parties' agreement. [27] Despite this obligation, cases occur where the buyer fails to pay the seller for various reasons, ranging from poorly supplied goods to financial inability to pay due to significant changes in conditions, such as the introduction of sanctions.

The introduced restrictions have significantly affected trade operations in various directions. This state of affairs was not foreseen by foreign trade participants, which led to a large number of unperformed foreign trade contracts and their subsequent termination. In some cases, it was possible to use the provisions of the law under which an obligation terminates due to the impossibility of performance if it is caused by a circumstance arising after the creation of the obligation for which neither party is responsible. [28]

In the event of untimely payment for goods, the supplier may apply to judicial authorities not only to protect the violated right and recover the cost of the supplied goods and incurred losses from the buyer but also to demand compensation for the buyer's breach of obligations.

Failure to Receive Foreign Currency Proceeds into Authorized Bank Accounts

Another significant risk related to foreign trade contract performance is the failure to receive foreign currency proceeds into accounts in an authorized bank. This obligation is provided for[29] by Federal Law No. 173-FZ dated December 10, 2003, On Currency Regulation and Currency Control (the "Law on Currency Regulation"). If a foreign trade participant exercised the degree of care and diligence required of them and took all measures for the proper performance of the obligation before the end of the contract and before the start of a customs audit, but ultimately did not receive the funds required by law in their settlement account and failed to comply with currency regulation legislation, the decision to impose administrative liability is generally overturned. [30]

It is important to note that when concluding a foreign trade contract, one must calculate such risks and provide for the necessary actions to ensure that audits do not reveal violations of currency legislation and that contract payments are received on time.

Counterparties' Refusal to Work Directly with Russian Companies

Unprecedented sanctions introduced by unfriendly countries against Russia form the basis for the refusal of many foreign companies to continue working with Russian business representatives. This is because continued work with Russian companies may affect the foreign companies themselves and result in legal consequences for them.

Most foreign companies have refused direct deliveries of goods to Russia but continue to supply their goods to other countries, from which Russian entrepreneurs bring them into Russia via parallel import. [31] Legislatively, parallel import in Russia is generally not permitted; however, in exceptional cases, such as the introduction of sanctions, consequences for such import will not apply.

Thus, Decree of the Government of Russia No. 506 dated March 29, 2022, On Goods (Groups of Goods) in Respect of Which Certain Provisions of the Civil Code of the Russian Federation on the Protection of Exclusive Rights to Results of Intellectual Activity Expressed in Such Goods and Means of Individualization with Which Such Goods Are Marked Cannot Be Applied, established that the Ministry of Industry and Trade of Russia, based on proposals from federal executive authorities, approves a list of goods[32] (groups of goods) to which the provisions of Articles 1252, 1254, Clause 5 of Article 1286.1, Articles 1301, 1311, 1406.1, Sub-clause 1 of Article 1446, Articles 1472, 1515, and 1537 of the Civil Code of the Russian Federation do not apply, provided that said goods (groups of goods) were released into circulation outside the territory of the Russian Federation by the right holders (patent holders) or with their consent.

Legal Consequences of a Foreign Supplier's Refusal to Perform a Contract

A foreign supplier's refusal to perform a concluded contract may carry legal consequences in the form of penalties defined by the contract; however, such consequences may not arise in some cases: [33]

• A party is not liable for a failure to perform any of their obligations if they prove that the failure was due to an impediment beyond their control and that they could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences;[34]
• If a party's failure is due to the failure by a third person whom they have engaged to perform the whole or a part of the contract, that party is exempt from liability only if:
  • They are exempt under the preceding paragraph;
  • The person they engaged would also be exempt if the provisions of that paragraph were applied to them;
• The exemption provided by this article has effect for the period during which the impediment exists.

Furthermore, the party who fails to perform must give notice to the other party of the impediment and its effect on their ability to perform. If the notice is not received by the other party within a reasonable time after the party who fails to perform knew or ought to have known of the impediment, the latter is liable for damages resulting from such non-receipt. It is important to note that the above rules will apply to counterparties only if the Vienna Convention applies to the arrangements between the foreign trade contract participants.

Legal consequences arising from the refusal of foreign companies to perform contracts with Russian entrepreneurs can be divided into several categories:

• The impossibility of performing a foreign trade contract due to a direct ban on exports/imports may serve as grounds for exemption from liability for failure to perform contractual obligations. During the imposition of sanctions, bans were introduced not only by unfriendly countries [35] against Russia; Russian legislation also introduced [36] counter-bans and restrictions on performing certain actions with counterparties from unfriendly states.
• The impossibility of performing internal contractual obligations between Russian partners due to the lack of delivery of goods or the supplier's refusal to perform the foreign trade contract. In this case, one participant (the dealer) purchased goods subject to import restrictions from foreign counterparties, and the buyer acquired such goods from the dealer; this procurement scheme became difficult due to the introduced bans and restrictions. The obligation under such a contract is subject to termination only if its performance is impossible exactly in the form agreed upon in the contract where, for example, the country of origin is explicitly reflected or such a product is no longer manufactured in any other country. The dealer's obligation to supply goods must be performed if there are no restrictions on the import of similar goods from countries not affected by sanctions.

Additionally, another sector must be mentioned for which the introduction of sanctions caused significant legal consequences. This sector is the procurement of goods for state and municipal needs, regulated by Federal Law No. 44-FZ dated April 5, 2013, On the Contract System in the Sphere of Procurement of Goods, Works, and Services for State and Municipal Needs.

To terminate or modify a contract due to a significant change in circumstances, [37] a party must prove (unless otherwise established by law): [38]

• The existence of force majeure circumstances and the duration of their effect;
• The existence of a causal link between the force majeure circumstances and the impossibility (delay) of performance;
• Non-involvement in the occurrence of the force majeure circumstances;
• Good faith adoption of reasonably expected measures to prevent (minimize) possible risks.

Recovering losses caused by the sanctions regime has, in most cases, become very difficult for parties to foreign trade contracts. However, considering existing circumstances and the practice of concluding such international agreements under mutual restrictions, one can minimize financial losses and provide for various opportunities to reduce possible risks by reflecting the necessary conditions in the text of the foreign trade contract.

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References

[1] Concluded in Vienna on April 11, 1980. The USSR joined the document by Resolution of the Supreme Soviet of the USSR No. 1511-I dated May 23, 1990, On the Accession of the Union of Soviet Socialist Republics to the United Nations Convention on Contracts for the International Sale of Goods.

[2] Award of a sole arbitrator of the ICAC at the TPP of the RF dated April 16, 2018, in Case No. M-140/2017, On the Recovery of Debt and Interest for the Use of Other People's Funds. The ICAC concluded that by handing over the goods to the carrier at its warehouse, i.e., at the place and on the day specified by the Respondent in the transport instructions received by the Claimant, the Claimant fully performed its obligations to supply the goods provided for by the Contract, and its claim for debt recovery is subject to full satisfaction.

[3] Article 66 of the Vienna Convention.

[4] Resolution of the Arbitration Court of the Far Eastern District No. F03-3372/2018 dated August 17, 2018, in Case No. A51-21716/2016, On the Recovery of Debt under a Contract for the Sale of Sawn Timber. After shipping the timber and issuing bills of lading, the supplier submitted the necessary documents to the bank, which performed negotiation by transferring funds to the claimant, and after negotiation transferred the documents to the issuing bank. En route to the port of destination, the vessel carrying the cargo sank along with the cargo in the Sea of Japan due to a storm. The supplier believed the buyer had a debt for the supplied timber due to the issuing bank's refusal to pay compensation under the letter of credit in the nominated bank, in connection with which it applied to the court. The claim was satisfied because the goods were delivered and loaded onto the vessel, and under the contract, from the moment the goods passed over the ship's rail at the port of shipment, all risks, including the risk of accidental loss or accidental damage to the goods, passed to the buyer.

[5] Article 67 of the Vienna Convention.

[6] Decision of the Arbitration Court of the Krasnodar Territory dated April 2, 2012, in Case No. A32-25055/2011, On the Recovery of Unjust Enrichment of the Railcar Component of the Fee for the Use of Railcars and Interest on the Grounds of Article 395 of the Civil Code of the RF. The court recognized as well-founded the claimant's argument that after crossing the border of the Russian Federation, the goods were owned by the importer, considering the goods were purchased on DAF terms, under which the date of transfer of ownership is the date the goods are placed at the disposal of the buyer (carrier) at the agreed point on the border. The fact of the railcars' arrival at the unloading stations was not disputed by the respondent; the LLC rendered services for providing rolling stock properly and on time, but the cost of the services rendered was not paid by the respondent. The claim was satisfied in part.

[7] Article 68 of the Vienna Convention.

[8] Article 451 of the Civil Code.

[9] Clause 37 of the Resolution of the Plenum of the Supreme Court of the RF No. 6 dated June 11, 2020, On Certain Issues of the Application of the Provisions of the Civil Code of the Russian Federation on the Termination of Obligations.

[10] Regulation on the Procedure for the Chamber of Commerce and Industry of the Russian Federation to Evidence Circumstances of Force Majeure. Appendix to the Resolution of the Board of the TPP of the RF No. 173-14 dated December 23, 2015.

[11] Additional Resolution of the Tenth Arbitration Appeal Court No. 10AP-1649/2024 dated April 11, 2024, in Case No. A41-29168/2023.

[12] Award of the ICAC at the TPP of the RF dated January 19, 2018, in Case No. 216/2016, On the Recovery of Advance Payment under a Contract. The Respondent's argument that under the contract its effect is recognized as terminated only after compensation for the expenses incurred by the Respondent was not accepted by the panel of arbitrators. According to the contract clause, "in the event of early termination of this contract, its effect is recognized as terminated after full settlements between the parties". The provisions of the contract apply to cases of its early termination, whereas in the case under consideration, the effect of the contract was terminated within the period agreed upon by the parties. The ICAC believes that in the current situation, the obligations to supply products should be considered terminated, and in accordance with Clause 2 of Article 81 of the Vienna Convention, the Respondent has the obligation to return the part of the advance payment corresponding to the value of the undelivered part of the products. The claims were satisfied.

[13] Article 81 of the Vienna Convention.

[14] Award of the ICAC at the TPP of the RF dated November 17, 1998, in Case No. 164/1996. The lawsuit was brought in connection with the supply of equipment of inadequate quality. The claimant resorted to a remedy incompatible with a demand for performance of the obligation by the respondent and, by virtue of Clause 1 of Article 46 and Clause 1 of Article 82 of the Convention, deprived itself of the right to demand from the respondent the supply of functioning equipment in exchange for the failed equipment or the payment of its value. If, in the claimant's opinion, the respondent allowed an unreasonable delay in taking the goods back, Article 88 of the Vienna Convention gave it the right to sell the goods and retain from the proceeds the amount of expenses for storage and sale of the goods, which subsequently, in the opinion of the ICAC, would not deprive the claimant of the right to demand from the respondent compensation for losses in the part not covered by the proceeds.

[15] Article 82 of the Vienna Convention.

[16] Award of the ICAC at the TPP of the RF dated May 17, 2012, in Case No. 96/2011, On the Recovery of Funds under a Contract for the Supply of Goods. Delivery of all batches of goods was made by the Respondent with violation of the deadlines established by the contract. The ICAC considered the recovery of penalties from the Respondent to be well-founded and satisfied the application because the respondent did not present evidence testifying to the occurrence of force majeure circumstances for it during the period of contract performance that prevented the performance of the contract.

[17] Article 314 of the Civil Code.

[18] Article 78 of the Vienna Convention.

[19] Award of a sole arbitrator of the ICAC at the TPP of the RF dated December 5, 2022, in Case No. M-78/2022. The parties entered into a contract providing for payment for goods in three parts. The buyer made the first and second payments, and the third payment was not made. The Claimant sent the Respondent a pre-trial claim, which remained without response and satisfaction. The arbitrator considered the calculation of penalties, found it correct, consistent with the terms of the contract and the actual circumstances of the case. There is no evidence in the case of repayment of the demand for the payment of penalties. In connection with this, the arbitrator satisfied the demand for recovery of the penalty under the supply contract, as the respondent violated the deadline for performing the obligation to supply the goods.

[20] Article 35 of the Vienna Convention.

[21] Award of the ICAC at the TPP of the RF dated June 24, 2001, in Case No. 106/2000. Demands for recovery of the cost of supplied poor-quality goods were satisfied by the court, as it was established during the trial that part of the goods during repeated checks conducted during the warranty period was recognized as poor-quality and prohibited for sale.

[22] Article 469 of the Civil Code.

[23] Resolution of the Arbitration Court of the Moscow District No. F05-20816/2015 dated February 12, 2016, in Case No. A41-41218/2015, On the Recovery of Debt under a Supply Contract, Penalty, and Losses. A supply contract was concluded between the claimant and the respondent, according to the terms of which the supplier undertook to manufacture goods (parts) upon the buyer's request and transfer them into the buyer's ownership, and the buyer undertook to accept and pay for the goods in the established procedure and timeframe. Since the goods were not paid for by the respondent within the established timeframe, the claimant withheld the goods not paid for by the respondent until the obligation was performed in full and applied to the arbitration court with a lawsuit. Having established the existence of debt for the respondent and non-performance of obligations in accordance with the contract, the courts concluded that the demand for recovery of losses should be satisfied.

[24] Article 74 of the Vienna Convention.

[25] Award of a sole arbitrator of the ICAC at the TPP of the RF dated August 3, 2022, in Case No. M-151/2021. The ICAC satisfied the demand for recovery of debt under a contract for the supply of goods in connection with the confirmation of product delivery by a consignment note and customs declaration, and the failure of the Respondent to present evidence of full payment.

[26] Article 53 of the Vienna Convention.

[27] Clause 1 of Article 424 of the Civil Code.

[28] Clause 1 of Article 416 of the Civil Code.

[29] Clause 1 of Article 19 of the Law on Currency Regulation.

[30] Resolution of the Arbitration Court of the Central District No. F10-7145/2023 dated February 28, 2024, in Case No. A09-4057/2023, On the Annulment of a Resolution on Imposing Liability for a Resident's Failure to Perform the Obligation to Perform and Terminate Obligations under a Foreign Trade Contract Subject to the Requirements of the Currency Legislation of the RF. The demand was satisfied because the company took all measures depending on it to perform and terminate obligations under the foreign trade contract, and the customs authority did not prove the existence of the company's guilt in committing the alleged administrative offense.

[31] Resolution of the Ninth Arbitration Appeal Court No. 09AP-50620/2023 dated September 20, 2023, in Case No. A40-23620/2023. The claimant applied to the court with a lawsuit to invalidate a decision to amend a goods declaration. The disputed goods were originally manufactured in Germany, released into civil circulation on the territory of a foreign state, and purchased on the territory of Germany by a company for subsequent sale; the specified normative acts regulating parallel import, i.e., import into the territory of the RF without the consent of the right holders of original foreign goods, are subject to application. Thus, obtaining the consent of the companies "PORSCHE" and "MERCEDES-BENZ" for the import of the disputed goods into the territory of the RF is not required, nor is the provision of permission for the use of intellectual property objects from the right holder of the trademark rights required, which excludes the necessity for the Company to conclude license agreements, as well as pay license fees or royalties. The claimant's demand was satisfied.

[32] Order of the Ministry of Industry and Trade of Russia No. 2701 dated July 21, 2023, On Approval of the List of Goods (Groups of Goods) in Respect of Which the Provisions of Articles 1252, 1254, Clause 5 of Article 1286.1, Articles 1301, 1311, 1406.1, Sub-clause 1 of Article 1446, Articles 1472, 1515, and 1537 of the Civil Code of the Russian Federation Do Not Apply, Provided that Said Goods (Groups of Goods) Are Released into Circulation Outside the Territory of the Russian Federation by Right Holders (Patent Holders) or with Their Consent.

[33] Article 79 of the Vienna Convention.

[34] Award of a panel of arbitrators of the ICAC at the TPP of the RF dated January 26, 2021, in Case No. M-74/2020. The panel of arbitrators found no grounds for satisfying the application for exemption from the application of civil liability measures with reference to force majeure circumstances. The Respondent did not specify which particular measures introduced in connection with the quarantine regime during the spread of the coronavirus pandemic led to the impossibility of it performing the obligations assumed under the Contract. Additionally, the Respondent did not perform the obligation to notify the other party of the impediments to contract performance according to Clause 4 of Article 79 of the Vienna Convention regarding written notification to the Seller of the occurrence of force majeure circumstances and confirmation of these circumstances by a chamber of commerce or other authorized competent body of the Republic of Uzbekistan.

[35] Decree of the Government of Russia No. 430-r dated March 5, 2022, On Approving the List of Foreign States and Territories Committing Unfriendly Actions Against the Russian Federation and Russian Legal Entities and Individuals.

[36] Edicts of the President of Russia No. 79 dated February 28, 2022, On the Application of Special Economic Measures in Connection with the Unfriendly Actions of the United States of America and Foreign States and International Organizations Joining Them and No. 81 dated March 1, 2022, On Additional Temporary Economic Measures to Ensure the Financial Stability of the Russian Federation.

[37] Decision of the Arbitration Court of the Moscow Region dated March 29, 2022, in Case No. A41-13431/2022, On the Termination of a Contract Concluded Between the Parties. A contract was concluded between the claimant and the respondent, under which the claimant assumed the obligation to transfer an asphalt-concrete mix to the respondent within the timeframe stipulated by the contract. However, during the contract's term, due to changes in the economic and political situation, force majeure circumstances arose that led to a sharp increase in prices for non-metallic materials (crushed stone, sand, and bitumen). The unfavorable epidemiological situation of 2020, the introduction of discriminatory restrictive measures in 2022, the need to find new suppliers and change routes and methods, and the increase in delivery time for consumables — including in view of the denazification operation — were collectively recognized by the court as grounds for contract termination due to a significant change in circumstances. Performance of the claimant's obligations became impossible. During the consideration of the case, the court decided to satisfy the claims and terminate the state contract.

[38] Question 7 of the Review of Individual Issues of Judicial Practice Related to the Application of Legislation and Measures to Combat the Spread of the New Coronavirus Infection (COVID-19) on the Territory of the Russian Federation No. 1, approved by the Presidium of the Supreme Court of the RF on April 21, 2020.