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The Supreme Court of the Russian Federation has reviewed a dispute concerning the execution of a state contract for the reconstruction of Olekminsk Airport in the Republic of Sakha (Yakutia). The case involved the Federal State Institution Rostransmodernizatsiya, the contractor Nordtransstroy LLC, and Almazergienbank JSC, which issued an independent guarantee to secure performance of the contract.

Background of the Dispute
Under the state contract, Rostransmodernizatsiya engaged Nordtransstroy to carry out reconstruction work at Olekminsk Airport. Almazergienbank provided an independent guarantee covering the return of advance payments and the payment of fines and penalties in the event of non-performance.

The contract was terminated by the contractor, citing serious deficiencies in the project documentation and restrictions associated with treasury-supervised accounts, which limited access to budgetary funds. Following the termination, Rostransmodernizatsiya demanded repayment of the unearned advance and penalties. When the contractor failed to comply, the institution submitted a claim under the independent guarantee. The bank refused to pay, arguing that the non-performance had resulted from the contracting authority’s actions.

Position of the Supreme Court
In its cassation appeal, Rostransmodernizatsiya argued that the lower courts had improperly interpreted the guarantee’s terms by making the guarantor’s obligation dependent on the circumstances of contract performance, contrary to the principle of independence of the guarantee from the underlying obligation.

The Judicial Chamber for Economic Disputes of the Supreme Court agreed, holding that such interpretation contradicts the legal nature of independent guarantees. The Supreme Court therefore overturned the lower courts’ rulings and remitted the case for a new hearing before the Arbitration Court of the Republic of Sakha (Yakutia).