diff --git a/app/controllers/epp_controller.rb b/app/controllers/epp_controller.rb
index 4f84f7284..96c2348f2 100644
--- a/app/controllers/epp_controller.rb
+++ b/app/controllers/epp_controller.rb
@@ -135,6 +135,16 @@ class EppController < ApplicationController
       @errors += obj.errors[:epp_errors]
     end
 
+    if params[:parsed_frame].at_css('update')
+      @errors.each_with_index do |errors, index|
+        if errors[:code] == '2304' &&
+            errors[:value][:val] == DomainStatus::SERVER_DELETE_PROHIBITED &&
+            errors[:value][:obj] == 'status'
+          @errors[index][:value][:val] = DomainStatus::PENDING_UPDATE
+        end
+      end
+    end
+
     # for debugging
     if @errors.blank?
       @errors << {
diff --git a/spec/requests/epp/domain/update/status_spec.rb b/spec/requests/epp/domain/update/status_spec.rb
new file mode 100644
index 000000000..1ef8d7900
--- /dev/null
+++ b/spec/requests/epp/domain/update/status_spec.rb
@@ -0,0 +1,37 @@
+require 'rails_helper'
+
+RSpec.describe 'EPP domain:update' do
+  let(:request) { post '/epp/command/update', frame: request_xml }
+  let(:request_xml) { <<-XML
+    <?xml version="1.0" encoding="UTF-8" standalone="no"?>
+    <epp xmlns="https://epp.tld.ee/schema/epp-ee-1.0.xsd">
+      <command>
+        <update>
+          <domain:update xmlns:domain="https://epp.tld.ee/schema/domain-eis-1.0.xsd">
+            <domain:name>test.com</domain:name>
+          </domain:update>
+        </update>
+      </command>
+    </epp>
+  XML
+  }
+
+  before :example do
+    sign_in_to_epp_area
+  end
+
+  context 'when domain has both SERVER_DELETE_PROHIBITED and PENDING_UPDATE statuses' do
+    let!(:domain) { create(:domain,
+                           name: 'test.com',
+                           statuses: [DomainStatus::SERVER_DELETE_PROHIBITED,
+                                      DomainStatus::PENDING_UPDATE])
+    }
+
+    it 'returns PENDING_UPDATE as domain status' do
+      request
+      status = Nokogiri::XML(response.body).at_xpath('//domain:status',
+                                                     domain: 'https://epp.tld.ee/schema/domain-eis-1.0.xsd').content
+      expect(status).to eq(DomainStatus::PENDING_UPDATE)
+    end
+  end
+end