Siemens says Russian deal has clause banning delivery to Crimea

MOSCOW, Dec 5 (PRIME) -- A contract signed between Siemens and Russia to deliver four gas turbines contained clauses prohibiting violation of the E.U. anti-Russian sanctions, including their delivery to Crimea, a representative of the German company told the Moscow Arbitration Court on Tuesday.

Siemens said in July that all the four turbines meant to be used on a Russian power plant on the Taman Peninsula were illegally shipped to Crimea, forcing it to cancel its licensing agreements to sell power equipment to Russian firms and suspend the current agreements with state-run companies. Later Siemens filed a claim against state industrial corporation Rostec’s companies seeking to void a delivery contract.

“Efforts have been made to ensure prohibition of violation of the E.U. sanctions by Siemens and to avoid possible responsibility for that,” the representative said.

The contract included clauses that granted Siemens Gas Turbine Technologies, a Russian affiliate of Siemens, to void the contract, signed with Rostec’s affiliates PJSC Technopromexport and LLC Technopromexport, if its implementation meant violation of the sanctions, including an obligation for the buyer not to use the turbines in Crimea.

A Technopromexport representative said that clauses of the contract contradict Russian legislation, “which was made in order to make Russian legal entities to comply with sanction restrictions introduced by the European Union.”

The contract stipulates that a Russian company – Siemens Gas Turbine Technologies – is a seller of the turbines and a Russian company – Technopromexport –– is a buyer, which means that both companies were established under Russian legislation and must operate in accordance with the legislation, the representative said.

The E.U. sanctions contradict sovereignty of Russia, the legal principle of economic space unity of the country, and the principle of free transportation of goods within it. Siemens is trying to force Russian companies and courts to comply with the sanctions of another international entity, the representative said.

“Common application of international regulations on the territory of Russia does not oblige Russian companies to comply with regulations and restrictions introduced by foreign companies and states against the Russian Federation,” the representative said, adding that the disputed contract stipulates that relations of the companies exclusively fall under regulation of Russian legislation.

Previously, the two subsidiaries of Rostec filed a countersuit against Siemens Gas Turbine Technologies asking court to void three clauses of the contract. The text of the clauses was not disclosed, but a Siemens representative said that they cover destination of the turbines.

End