The background of this contract reflected all “dark spots” of the national diplomacy, such as the striving to sit on the fence, inability to define priorities and consider the consequences, inadequate reaction to the third countries' pledges and apparent neglect of their own military industrial complex needs.

According to Iran.ru, the supply agreement on S-300 surface-to-air missile systems was signed between Iran and Russia in 2005 and officially publicized in 2007. The deal cost $800 mln, with $167mln of prepayment. Delivery of missile systems was regularly postponed due to technical reasons.

“Technical reasons” is namely the situation the Russian military industrial complex appeared in. Simply put, that’s the inability of the industry to ensure fulfillment of the contract liabilities. The problem lies not in the financing sphere, but rather in the lack of production base and design staff. They can provide ground test samples, which however lack the required characteristics for mass production. This becomes a common practice for the Russian military industrial complex; recent scandals with return and reclamation on the weapon contract with Algeria and India should be mentioned here. Basically, the S-300 contract could have become another “Bushehr contract” for Russia - a source of funding and maintenance of its nuke industry in mid-90s . Still, it did not, since the needs of the military industrial complex were sacrificed to “big policy” considerations as the current Russian diplomacy and defense officials come to see them, the website’s editorial says.

In late 2008, Moscow suspended implementation of the contract “due to political reasons” after a new leader won the presidential race. This was a period of “reloading” announced by Barack Obama and endorsed by foreign policy heads of U.S. and Russia, implying “change of course” with regard to Russia. Since the U.S. assured the “reloading” meant to be a long-term and serious initiative, Russia made a unilateral move basing on U.N. Security Council Resolution 1929.

Article 8 of this Resolution said that“all States shall prevent the direct or indirect supply, sale or transfer to Iran, from or through their territories or by their nationals or individuals subject to their jurisdiction, or using their flag vessels or aircraft, and whether or not originating in their territories, of any battle tanks, armoured combat vehicles, large calibre artillery systems, combat aircraft, attack helicopters, warships, missiles or missile systems as defined for the purpose of the United Nations Register on Conventional Arms.” The Security Council further “called upon all States to exercise vigilance and restraint over the supply, sale, transfer, provision, manufacture and use of all other arms and related materiel.”

The most interesting thing is that the S-300 systems did not fall under either the 8th Article of the Resolution or Category VII of the U.N. Register on Conventional Arms. Despite this, then-president Dmitry Medvedev signed a decree in September 2010 “On implementation of U.N. Security Council Resolution 1929 of June 9, 2010”, which was almost literal citing of the Resolution’s Article 8, unilaterally amended with reference to S-300 systems. This is just the official version which leaves many questions behind.

Iran has been constantly stressing that it did not aim to take occasion to “grab” much money from Russia. Iranian Ambassador to Russia Mahmoud-Reza Sajjadi repeatedly stated that Iran’s suit just aims to “provide Russia with judicial grounds to resume cooperation”, and nothing else. The ruling of the Geneva court will favor Iran, of course; not because of the judicial flawlessness of the claim or Western sudden liking for Iran. The thing is that this decision will not cost a penny (international financial sanctions will ban the payment), while Russia’s reputation will suffer a huge damage. Russia’s repute as a military-technical cooperation partner is already ruined, and the court ruling will further deteriorate it. After the S-300 case Russia can forget about entering the air defence market; this would be a mere PR move on Russia’s part, hiding its poor military industrial complex and spineless policy. Besides, Iran would easily create a similar complex independently (or in cooperation with China and Belarus). This is namely what it is now successfully implementing, basing on the available S-200 systems.