Kirill Katkov has analysed for Pravo.ru the conclusions of the Russian Supreme Court on the possibility of refusing to supply goods due to sanctions

The Supreme Court of the Russain Federation considered a dispute in which a retail chain refused to supply a customer with a paid-for order, referring to its unavailability due to sanctions. At the same time, the item was available on the retailer’s website, but at an increased price. The company returned the full price of the device to the buyer, but he was not satisfied with this decision. The first instance obliged the outlet to transfer the goods to the plaintiff, but at a higher price, while the appeal and cassation cancelled the decision and denied the claim. They concluded that the defendant could not fulfil the transaction due to circumstances beyond its control. The Supreme Court cancelled the acts of the lower instances and sent the case for a new hearing on appeal. The Board of Civil Cases pointed out that the courts had not checked whether the seller actually had the device or not, and also reminded that the return of money for goods without legal grounds “is not a ground, provided by law, for refusal to fulfil an obligation”.

Kirill Katkov, Associate at Maxima Legal, confirmed to Pravo.ru that after the sanctions of 2014 and their tightening in 2022, cases involving consumer claims against sellers who refused to supply imported goods with reference to the difficult geopolitical situation have become common in practice.

In the expert’s opinion, the ruling clarifies the Supreme Court’s position on what points courts should pay attention to when resolving such disputes. The act directs courts to examine the circumstances more carefully and objectively assess sellers’ arguments that delivery is impossible because of sanctions against the Russian Federation. It is impossible to refer to the impossibility to fulfil the contract, if in fact the seller can deliver the goods, but it will bring him losses due to price increases on the part of the manufacturer.

“This definition will contribute to the fact that consumers will become more active in defending their rights in case sellers refuse to hand over the goods due to the increase in their cost caused by the sanctions,” Maxima Legal’s Assocoate emphasised.

Kirill noted that the definition of the Supreme Court corresponds to the practice. For example, a similar situation was in case No. A56-87960/2022. The consumer paid for Apple products before the sanctions were imposed in 2022. The seller cancelled the orders and returned the money. He claimed that the goods were out of stock and that the foreign company had refused to supply the Russian Federation. In fact, the seller had the gadgets and sold them, but for a higher price. As a result, the court concluded that the defendant did not prove force majeure.

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