Russian Court of Appeal judgment in Karpinsky – foreign sanctions are not force majeure in contractual penalty claim

5 November 2026

The Russian Thirteenth Arbitrazh Court of Appeal has dismissed an appeal by Russian company Plastavia against a judgment ordering it to pay RUB 858,542 to Russian federal institution AP Karpinsky All-Russian Scientific Research Geological Institute as a contractual penalty for late delivery of goods under Article 330 of the Russian Civil Code – AP Karpinsky All-Russian Scientific Research Geological Institute v Plastavia, Case No. A56-47066/2026.

Plastavia contracted to supply a radio altimeter to Karpinsky by 2 May 2024 under a contract for the supply of goods, and delivered it on 20 February 2025. Karpinsky successfully claimed RUB 858,542 as a penalty for late delivery of goods under Article 330 of the RCC, calculated in accordance with the contract, in the Arbitrazh Court of the City of St Petersburg and the Leningrad Region. Plastavia did not raise any sanctions points at this stage.

Plastavia appealed to the Thirteenth Arbitrazh Court of Appeal against that judgment arguing that:

• It was not liable for the late delivery because it was not at fault (as is required to incur liability for late delivery under Article 401 of the RCC); the delay was caused by sanctions imposed by states ‘unfriendly’ to Russia which were force majeure and beyond its control.

• In the alternative, the penalty should be written off under para 3(d) of Government Resolution No. 783 because contractual performance is impossible because of foreign sanctions. See our Russia legislation page for an explanation of this resolution.

The Court of Appeal dismissed the appeal. It said:

• The sanctions imposed by foreign states are not force majeure for the purposes of Article 401 because they were in force at the time the contract was agreed. In any event, under Article 2(1) of the RCC, foreign sanctions are a business risk and cannot be characterised as force majeure events to relieve a party of its contractual or statutory obligations.

• The penalty should not be written off under para 3(d) Government Resolution No. 783 because that relates to non-performance (not late performance) caused by foreign sanctions.

See our Russia judgments page for all Russian sanctions judgments.