Tech companies left Russia in droves after its offensive in Ukraine began. But about three months after the start of the conflict, some of them are facing legal action accusing them of having unilaterally broken the contracts that bind them to Russian companies and consumers. Dell, Apple and Netflix are currently in the case. However, the complaints were mostly filed in Russia, which means they may not have the desired effect.
Big tech companies have largely supported Western sanctions imposed on Russia as part of the war in Ukraine. Others have made this choice deliberately and others have been coerced by government sanctions. The export of many vital technologies that could be used by Moscow in the manufacture of weapons or military infrastructure has been prohibited. These include chips and other electronic products, telecommunications equipment, sensors, aerospace technologies, naval equipment, to name but a few.
This has put the Russian tech industry in a very bad state, a situation that could cripple it for a while. However, complaints have begun to be filed in Russian courts protesting against this state of affairs and claiming damages. Recently, Russian sources reported that a Moscow arbitration court seized nearly $11 million from Dell LLC after the company failed to provide paid services to a local systems integrator. Indeed, Dell is on the list of companies that have left the Russian market or reduced their activities in the country since the beginning of the conflict.
In early April, Moscow-based IT systems integrator Talmer sued Dell when the US computer giant refused to provide technical support services for VMware as previously agreed. Dell is VMware’s representative in Russia and was reselling these services until March 1, 2022. Talmer allegedly paid Dell for these services beforehand, but since he never received these services, the Moscow Arbitration Court held that it was a violation of the terms of service. Asked about the case, a Dell spokesperson said the company does not comment on ongoing litigation.
Furthermore, despite the cessation of the provision of services by WMware in the Russian Federation, the defendant did not take any measures concerning an alternative method of performance of the obligations and did not return the advance payments Talmer LLC , specifies the judgment of the arbitration tribunal according to the Russian media which reproduced it. As a result of this decision, Russian courts seized 778,526,223 rubles (approximately US$111,29,561) from local Dell bank accounts. The decision can be appealed to the ninth court of arbitration within one month.
But Dell has not specified whether it intends to exercise this right. Like Dell, Apple faced a similar legal problem late last month after a Russian law firm (Chernyshov, Lukoyanov & Partners) filed a class action lawsuit for breach of contract, seeking damages of 90 million rubles, or about $1,290,000. The lawsuit claims that Apple unilaterally withdrew its Apple Pay payment service from the country, depriving Russian iOS users of a feature that was marketed to them and that they expected to enjoy indefinitely when they purchased their devices. iPhone.
Apple’s decision would have essentially debased the value of the iPhone in Russia, further increasing the total amount of damages that can be sought, with the law firm demanding a fine of 50% of the compensation amount also for moral damages. The same law firm filed a class action lawsuit against Netflix in April on similar grounds of breaching the terms of service, seeking compensation of 60 million rubles ($860,000). As a reminder, Netflix said last March that it had suspended its service in Russia.
He also announced that he had temporarily halted all future projects and acquisitions in the country as he assessed the impact of Moscow’s invasion of Ukraine. According to the law firm, the motive for the lawsuit is a violation of the rights of Russian users due to Netflix’s unilateral refusal to provide services in Russia. Legal experts across the Western world agree that the unprecedented sanctions on Russia have pushed everyone into uncharted territory as companies scramble to trace their movements and assess the consequences of their withdrawal from the Russian market.
On the one hand, companies need to monitor and manage the rapid evolution of sanctions that encompass a growing list of entities, to avoid risking heavy sanctions. On the other hand, they face civil fines and even criminal prosecution from the Russian customers they abandon. Some believe that Western sanctions have certainly dealt a blow to the Russian tech industry, but add that the global tech industry has also been affected. They believe that the use of technology companies as a weapon of war has ruined the blind faith that people had in this industry.
What is your opinion on the subject?
What do you think of the complaints from Russian businesses and consumers? Are they founded?
Do you think Western sanctions have undermined people’s trust in technology?
See as well
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