ZHUKOVSKY /Moscow Region/, August 26. /TASS/. Negotiations over a new contract for the supply of air defense systems S-300 to Iran are continuing, but the parties remain divided over the procedure Iran will follow to revoke its lawsuit for Russia’s decision to sever the previous contract, a source in the Russian military-technical cooperation establishment told TASS.

"Consultations are in progress. A final agreement has not been reached yet. Iran says it will revoke the lawsuit regarding the previous contract when it gets the first batch of products under the new one, while Russia insists the lawsuit should be revoked before it takes any action under the newly-concluded deal," the source said.

According to the official, Russia was firm in its intention to supply S-300 air defense systems to Iran. Possibly, the contracting parties will agree to compromise and the deliveries under the contract will start simultaneously with the lawsuit’s withdrawal.

In reply to a question from TASS Rosoboronexport’s Vyacheslav Davidenko said he had no comment to offer.

Under the 2007 contract Moscow pledged to deliver to Iran five battalions of S-300 air defense launchers $800 million worth. In the autumn of 2010 the then Russian President Dmitry Medvedev signed a decree to outlaw the supplies of S-300 to Iran. The contract was severed and the advance payment returned to Tehran. Iran filed a $4-billion suit in Geneva’s court of arbitration.

In the spring of 2015 President Vladimir Putin lifted the ban from the export of S-300 systems to Tehran. Iranian Defense Minister Hossein Dehghan said he was expecting the contract would be concluded later this week.