In an unusual case at Moscow’s arbitration court, a Russian company and an Estonian company have agreed not to litigate but to wait for EU sanctions to end, with the contract formally remaining in force until the restrictions are lifted.
The Contract
On 22 February 2022 — just two days before Russia’s full-scale invasion of Ukraine — Moscow-based OOO “Brig-Center” and Estonian Flugger Marine OU signed contract No. 220222FL01 worth $199,813. Under the terms, the Estonian company was to supply boats of the Brig brand.
At the time, Brig-Center was a distributor of the Ukrainian company Brig Ltd, which manufactured inflatable boats and motorboats. The production facility was located in the Kharkiv region, in the town of Derhachi.
Why the boats were ordered through an Estonian company remains unexplained in the case materials.
What Went Wrong
According to the arbitration court filings, on 1 March 2022 the Russian company transferred payment for the boats but never received them. There are several possible reasons for this.
First, the manufacturer itself ceased production. Second, on 15 March 2022, EU sanctions came into force prohibiting supplies to Russia of “yachts and other vessels for leisure and sport; rowing boats and canoes.”
The Lawsuit
Brig-Center subsequently filed a claim with the Arbitration Court of Moscow, seeking to terminate the contract with the Estonian company and recover the debt of $199,813.
In the end, however, the parties decided to conclude a settlement agreement instead.
The Settlement Agreement
According to court documents cited by Sanctions Lists, the agreement states:
“The parties confirm that the reason for non-performance of the Contract within the established period is force majeure circumstances … the effect of which continues to the present. Namely, Council Regulation (EU) 2022/1269 of 21.07.2022, supplementing Regulation 833/2014, introduced sanctions in respect of goods supplied from the European Union to the Russian Federation…
The parties confirm that they are interested in performing the Contract to the present day and henceforth on the same terms as before…
The parties confirm that … the Contract remains in force and the deadline for the parties to fulfil their obligations under this Contract is postponed proportionately to the time during which the above circumstance and its consequences persist, namely the effect of Council Regulation (EU) 2022/1269 of 21.07.2022, supplementing Regulation 833/2014, which introduced sanctions.”
A Rare Approach
The case is notable for its unusual resolution: rather than terminating the contract and ordering restitution, both parties agreed to keep the agreement alive and defer performance indefinitely, tied to the duration of EU restrictive measures. The Moscow arbitration court approved the settlement, leaving the contract formally valid but effectively suspended until sanctions are lifted.
