In an unprecedented move, Algeria earlier decided to return to Russia 15 MiG aircraft delivered in 2006-07 under a $1.28 billion contract, citing the "inferior quality" of certain components and units.
Russian arms export monopoly Rosoboronexport signed the contract to deliver 29 one-seat MiG-29SMT Fulcrum fighters and six two-seat MiG-29UB fighters in March 2006 as part of an $8 billion military-technical cooperation agreement with Algeria.
The termination of the contract "will not threaten other contracts [with Algeria]," the head of the Federal Agency for Industry, Andrei Dutov, said in an interview with the Vedomosti newspaper published on Monday.
Algeria began refusing deliveries from May 2007 and in October stopped payments on other military contracts pending the return of the MiGs.
Experts suggest Algeria may have opted instead for French Rafale fighters as France builds up its presence in the North African state.
Commenting on Algeria's decision, Dutov said it could have been politically motivated.
"The reasons for the termination of the Algerian contract are likely to lie in the sphere of politics. It has nothing to do with industry," he said.
"Every country chooses its own allies, and part of the arms trade is the search for such allies," Dutov added.