“Iran’s complaint is an irritating issue in our cooperation which we hope to get rid of,” the Kommersant daily quoted a source in the Federal Service for Military and Technical Cooperation as saying.

According to Kommersant, the issue was discussed during Russian Foreign Minister Sergei Lavrov’s visit to Iran in mid-June. Tehran however refused to withdraw the suit.

Iran’s Defense Ministry and The Aerospace Industries Organization, an Iranian state company, launched the $4-billion lawsuit against Russia’s state arms corporation Rosoboronexport in the international arbitration court in Geneva on April 13, 2011, seven months after then-president Dmitry Medvedev signed a decree terminating the contract, in line with UN Security Council Resolution 1929, which bans supply to Iran of conventional weapons including missiles and missile systems, tanks, attack helicopters, warplanes and ships.

According to the daily, the case will be heard in the near future.

Meanwhile, a source in the Russian government told the Kommersant daily that the court would likely rule against Russia.

“Unfortunately, we have no grounds to think that the court will take into account all the details of the complicated Iranian issue,” the source said, adding that Russia may be obliged to pay “a giant fine” which could amount to about one-third of the country’s annual revenues from arms sales.

The paper, quoting an unnamed Russian government source, said Tehran would insist in court that the S-300 surface-to-air missile systems did not fall under the UN sanctions.

The government source also did not rule out Moscow would resume missile supplies to Tehran if the court agreed with the Iranian claim, Kommersant reported.

Iran has previously applied to the International Court of Justice to try to force Russia to fulfil the terms of the contract or pay compensation. The complaint is curently under examination at the relevant international legal bodies.

Iran remains keen to acquire highly advanced air-defense systems like S-300 in order to deter a potential attack from Israel or the United States on its nuclear facilities, which both nations claim are involved in nuclear weapons development. Iran denies developing atomic weapons. Iran has previously acquired the Russian Tor-M1 short-range air-defense missile system.

Israel has previously exerted strong diplomatic pressure on Moscow not to deliver S-300 and other air-defense systems.