10 August 2012
Kommersant publishes commentary by Denis Arkhipov

Russia toughens Iran lawsuit position, still hopes for amicable settlement

Iran's lawsuit against Russia for its refusal to supply S-300 air-defence systems could have serious political consequences. Kommersant has learned that the leadership of the Russian Federation has made the decision that unless Tehran withdraws the suit, Moscow will deprive it of international support and occupy a tougher position on Iran's nuclear problem. Moreover, Kommersant has learned that the claims of the Iranian authorities that the sum total of the lawsuit that they have filed amounts to only $900 million (not almost $4 billion) do not entirely correspond to reality.

After it was learned that Iran had brought suit against the Russian Federation for $4 billion (see Kommersant for 18 July), a Kommersant source in the RF Government said angrily: "We are supporting them and occupying a constructive position in the negotiations on the nuclear problem, and this is how they are now repaying us." Kommersant's source termed the lawsuit business not nice, and the Iranians, ungrateful. Now, a Kommersant administration source says, Moscow's position has stiffened even more: it is transferring the issue of the lawsuit from the judicial to the political plane.

"We have already made it understood to Iran that legal actions do not further the development of our relations but our requests for the documents to be pulled from the court were not heard," Kommersant's source says. This, he says, is forcing the country's leadership to adopt countermeasures - Moscow is prepared to deprive Tehran of support on the nuclear problem. "We will try before the next session of the Six international mediators to convey our position once more, dispatching a government delegation to Tehran. And if this is followed once again by a refusal, Iran will in the world arena be negotiating on nuclear issues on its own," the Kremlin official threatened. A Kommersant source in the RF Foreign Ministry confirmed that the diplomats have been instructed in the dialogue with the Iranians to adhere to precisely this course.

Iran is at this time very much in need of the support of the Russian Federation, meanwhile. Catherine Ashton, head of the EU External Action Service, announced last week that the next stage of the negotiations on Iran's nuclear programme would take place at the end of August. But Kommersant has learned that the date of the session of the Six has not yet been determined. Negotiations of representatives of Iran and the IAEA Secretariat are scheduled for 22 August, meanwhile - they will take place in Vienna. Kommersant was told of this by a source close to the organization's secretariat. The fate of continued dialogue in the Six format will largely depend on this meeting.

Based, though, on the outcome of the last full-scale round of negotiations of the Six in Moscow, which produced no results, a Kommersant source close to the American delegation announced that the United States saw no point in the continued search for diplomatic solutions of the problem, banking on a tightening of the sanctions pressure. If, though, the negotiations are terminated, this will conclusively persuade the Israeli "hawks" of the need to mount an attack on Iran.

Moscow has always opposed sanctions and advocated negotiations with Iran. "The position championed by the Russian Federation at all forums that exclusively diplomatic means should be employed for a solution of the Iranian question, the strongly-worded response to the calls to cut the Iranian knot by force, the regular peace initiatives of the RF Foreign Ministry, and the statements that the Western rhetoric concerning Iran conceals an aspiration to regime change in Tehran - all this has been to Iran's benefit," Aleksandr Kolbin, expert of the PIR Centre, told Kommersant.

Iran, it would appear, understands this and is trying to soften the negative impact of the filing of the lawsuit. Seyed Mahmoud Reza Sajjadi, Iran's ambassador to the Russian Federation, told Izvestiya that Tehran is seeking from Moscow not $4 billion but $900 million, the $3 billion compensation "as punishment of Russia" was added by the Geneva Arbitration Court itself "unbeknownst to the Iranians and against its wishes."

The Geneva Arbitration Court was unable yesterday to comment on the situation on the spot. The lawyers questioned by Kommersant, on the other hand, say in unison that a situation where an arbitration court itself alters the claims or sets the amount of damage before a decision is rendered is unlikely. "The arbitrators cannot before a decision has been rendered pronounce on the merits of the stated claims," Denis Arkkhipov, senior associate of the Yegorov, Puginskiy, Afanasyev, & Partners law office, told Kommersant.

Experts believe that the amount of the lawsuit could have been increased only if, aside from the $900 million (the sum total of the S-300 contract), Iran had additionally sought compensation for damage to its business reputation or, on the other hand, compensation for pain and suffering, having asked the court to independently determine its amount. Radzhab Safarov, director of the Centre for Study of Contemporary Iran, which is close to Tehran, had earlier made it understood to Kommersant that Tehran would like to obtain from the Russian Federation contract forfeits as of 1995, "when, as a consequence of the Gore-Chernomyrdin deal, military-technical cooperation between Russia and Iran was essentially frozen."

"When the question of compensation is left to the discretion of the court, arbitration determines the amount in dispute in advance in order to establish the amount of the arbitration charge," Dmitriy Cheryakov, managing partner of the Muranov, Chernyakov, & Partners law firm, told Kommersant. He says that this is done to rule out arguments over the amount of the arbitration award and also to protect against unscrupulous plaintiffs. "The amount of the charge is deposited with the court in advance - this is an obligatory condition for making up the composition of the arbitrators and starting the proceedings," he explained.

All this serves to indirectly confirm that the substantial increase in the amount of the lawsuit could not have occurred unbeknownst to Iran. Nonetheless, Moscow continues to hope that the "heavy diplomatic artillery" will not have to be rolled out. "The negotiations with Iran have thus far been extremely difficult, but we are hoping, nonetheless, that an amicable, out-of-court settlement can be reached," one further Kommersant Kremlin source said.

Text of report by the website of heavyweight liberal Russian newspaper Kommersant on 10 August

[Ivan Safronov, Yelena Chernenko, Anastasiya Gorshkova, and Aleksandr Gabuyev report: "The S-300 Lawsuit Is Being Turned Against Iran: Russia Is prepared To Deprive Tehran of Support"]

Source: Kommersant website, Moscow, in Russian 10 Aug 12

The article is translated by BBC.


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Denis Arkhipov

Denis Arkhipov

Moscow, Limassol