The Moscow Arbitration Court has considered a lawsuit filed by the Ministry of Industry and Trade of the Russian Federation against JSC ELVEES-NeoTek, a leading Russian developer of high-tech security systems using image recognition, radar, video and thermal imaging surveillance technologies.
The Ministry demanded in court that the company return a subsidy in the amount of 58 million rubles and fines in the amount 25 million. According to court materials, the Ministry granted ELVEES-NeoTek a subsidy for developing and producing an intelligent system to prevent unauthorized copying of information. An agreement signed in 2019 stipulated that ELVEES-NeoTek would receive income from the sale of developed systems, which amounted to 11,88 million on December 31st, 2022; 50,16 million June 30th, 23rd and so on.
However, according to accounting documentation provided by ELVEES-NeoTek to the Ministry of Industry and Trade of Russia, the revenue achieved for the first three years was zero rubles. The company stated that this was due to force majeure caused by the geopolitical situation at the time and unfriendly actions by foreign countries. Nevertheless, the court ultimately sided with the Ministry and recovered 58 million rubles in subsidies, a fine of 25 million rubles, and interest on the use of other people’s money in the amount of 23 million.
The court noted that ELVEES-NeoTek did not indicate which specific trade restrictions prevented it from fulfilling its obligations under the agreement with the Ministry. It did not provide a link to the relevant documents adopted by the authorized bodies of the United States and Europe. It also did not provide any supporting documents confirming that the defendant was subject to personal sanctions imposed by the United States or the European Union.
