Iran : still puzzled over scrapped arms deal with Russia

The Iranian Foreign Ministry has expressed again its surprise over Russia's decision to scrap a deal to deliver S-300 air defense systems to Tehran but said this was unlikely to affect relations between the two countries. "Matters of this kind must not have any negative effect on political relations, nor are they having any such effect,” ministry’s spokesman Ramin Mehmanparast told a news conference in Moscow on Monday. "However, we still cannot understand the reason for the non-delivery of what are considered to be defensive systems," he said. Iran is seeking compensation from Russia in international arbitration for breach of the $800 million contract to supply five battalions of S-300PMU-1 to Tehran, signed in 2007. The Kremlin banned the sale of S-300s to Iran in September last year, saying the systems were covered by the fourth round of sanctions imposed by the UN Security Council against Iran over its nuclear program. Russia has paid back Iran's $166.8 million initial payment on the contract. Russian Foreign Minister Sergei Lavrov said on Monday that Iran has no legal grounds to receive compensation from Russia over cancellation of a contract to deliver S-300 surface-to-air missile systems. “We have returned the prepayment to them and we believe the issue should be closed,” he said in an interview with the Profil magazine.