The state enterprise has entered into an agreement with a commercial company for the sale of excess equipment. Even before the parties began to fulfill contractual obligations, the state enterprise was transformed into a state-owned one. The State Property Committee of the Russian Federation has prohibited the company to execute the contract and demanded its termination. A commercial company requires the execution of the contract under the threat of penalties, referring to the fact that the decision to transform the company into a government one cannot affect the obligations that arose before the status of the company was changed.
The dispute went to arbitration.
What decision should be made? How should it be motivated?
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