We bought software for 400 million and were disconnected from support. Russian chip developer sues US CAD supplier

The Russian chip developer SPC "Elvis" has gone through three courts in an attempt to recover of the Russian office CAD electronic engineers Synopsys 81.4 million from the American developer for unjust enrichment. In rubles September 2023, the cassation court, like the two previous instances, refused to fully satisfy its claims - the company managed to sue only part of the amount.

As follows from the published court documents, we are talking about money for technical support. In December 2021, Elvis and Synopsis SPC entered into an agreement on licensing and maintaining the software necessary for the Russian company to manufacture its own products. SPC Elvis paid for products in the amount of about 419.3 million rubles and 20% VAT in the amount of 50.6 million rubles. And the cost of technical support amounted to about 108.5 million rubles.

But since March 2022, the Elvis SPC could not enter his personal account on the site solvnet.synopsys.com. The computer monitor displays the message "Your account has expired." Thus, the provision of technical support services for licensed products, including receiving software updates/improvements, was actually suspended.

Synopsys Russian office has been operating since 2011

The Russian developer has repeatedly made attempts to get explanations from Synopsis about the reasons for the suspension of the provision of services. And the latter only in May notified the SPC by email that it plans to terminate its activities within 2-3 months. Synopsis also indicated that as of today, the supply of licenses, the provision of technical support services for Synopsys software products has been suspended until further instructions are received. There were no other notifications on the fact of termination of the provision of technical support services from the company to the SPC, the court established.

Synopsis did not respond to the demand of the SPC to justify the reason for the non-provision of services, after which the Russian company, in its claim sent in June, declared a refusal of services and demanded payment of the amount of unjust enrichment from April 1 to December 2022 inclusive, as well as interest for the use of other people's funds.

However, the court did not agree that the entire amount required by the SPC should be paid. Considering that the subject of the agreements is the provision of services, the cost of which for a period of 12 months is about 108.5 million rubles, the court considered that the amount of the cost to be returned should be proportional to the period before the termination of the liability relationship, namely from July 10, 2022 (notice of refusal of the contract in June plus 30 days). In this regard, the amount of unjust enrichment in the amount of the period after the termination of contractual relations will be about 51.2 million rubles, the court decided. So much he ordered Synopsis to pay the SPC.

I.e. the period of actual non-provision of services until the customer is notified of their refusal was out of compensation. The appellate and cassation instance agreed that this is correct, based on the provisions of# block_309 Art. 309, block_779 779, block_781 781, block_453 453, block_1102 1102 of the Civil Code of the Russian Federation.

Plaintiff's reference to what the trial court did not establish, that services have not been provided since the imposition of sanctions is unreasonable, since it follows from the court decision that foreign copyright holders of licensed software products have suspended the supply of software to Russia, and the provision of any services and updates to licensed software products, - said in the ruling of the appellate instance in the case[1]. - As can be seen in the court decision, we are talking about foreign copyright holders. At the same time, it does not follow from the text of the decision that it was the defendant who suspended the provision of his services from the date of the imposition of sanctions.

The founder of Synopsis LLC, from which Elvis SPC demands money, according to the database of legal entities Kontur. Focus, the Irish legal entity Synopsys - Synopsis International Limited is listed. In 2021, Synopsis received revenue of 1.427 billion rubles and a net profit of about 38 million rubles. In 2022, Synopsys actively hired staff in Russia for the subsequent export to its office in Armenia (for more information on this, see here).

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