The Nizhny Novgorod Arbitration Court recovered €3 million from the German company Schottel for undelivered marine equipment. The dispute became a landmark example of how economic sanctions are interpreted by courts in the context of commercial obligations.
Okskaya Shipyard entered into contracts with Schottel for the supply of azimuth thrusters and related equipment back in 2021–2022. The German company received an advance payment but failed to fulfill its obligations. In response to claims for a refund after the contract was terminated, the defendant argued that the delay was caused by “force majeure circumstances”—sanctions imposed against Russia.
However, the court rejected this argument. Economic restrictions, as the court stated, are an element of entrepreneurial risk and do not relieve parties from contractual obligations. Force majeure presupposes the impossibility of performing the contract due to objective circumstances, and sanctions themselves do not fall under this category.
Earlier, the shipyard attempted to seize Schottel’s assets in Russia, but this request was not granted. Nevertheless, recovering the contract amount was a significant outcome for the Russian company. The ruling underscores the need to consider sanctions risks when concluding international contracts and to include clear protection mechanisms in them.
This case reminds businesses: force majeure is not a universal excuse. Companies operating under sanctions should proactively incorporate flexible terms into contracts to minimize risks and avoid disputes.
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