In Russia, Winning does not Guarantee Victory
In February of last year, we reported on how a Norwegian company called Telenor was locked in battle with a Russian company called Storm LLC, proxy for a Russian firm called Altimo, itself a proxy for a Russian congolmerate called Alfa Group, over control of a Ukrainian telecommunications enterprise called Kyivstar GSM. As is the usual thing, the Russian company was playing dirty, and the Norwegians turned to the American legal system for help, notching a big victory over the Russian side.
The Russians responded by launching a billion-dollar lawsuit against Telenor in an obscure Siberian court using a proxy entity called Farimex over shares held by Telenor in the Russian telecom giant VimpelCom.
Now Telenor’s website reports the following:
Telenor on Monday learned, through a press release said to be issued by Farimex Products, of a decision in a Siberian appeals court in Omsk purporting to arrest Telenor and Altimo’s shares in VimpelCom. “If this is true, it is an outrageous decision, which we intend to overturn using all available means,” said Jan Edvard Thygesen, EVP and head of Telenor’s operations in Central and Eastern Europe.
Using a ruling it obtained in Khanty-Mansiysk in August this year, Farimex has apparently managed to have the Omsk court issue an arrest order, not only against Telenor’s VimpelCom shares, but also against Altimo’s VimpelCom shares – despite the fact that the Khanty-Mansiysk court has held that Altimo was not liable for any damages. The Khanty-Mansiysk court held Telenor solely liable for VimpelCom’s alleged late entry into the Ukrainian mobile market and ordered Telenor to pay VimpelCom USD 2.8 billion in damages. This ruling has been appealed by Telenor, which considers the ruling absurd and the case to be wholly without merit. The appeal is scheduled to be heard in the Omsk court on 18th November.
“We see absolutely no reason for the Omsk court to arrest Telenor’s VimpelCom shares ahead of the scheduled appeals hearing,” said Jan Edvard Thygesen. “The timing of the arrest and the inclusion of Altimo’s shares strongly suggests that there were other motives for this arrest, and we believe this is yet another of Alfa’s collusive actions. There are already media reports that this is meant to prevent Alfa’s creditors from getting access to Alfa’s shares. If that is the case, it could limit other Russian companies’ ability to obtain loans from international banks for many years to come. We feel confident that Russian authorities will look into the matter immediately,” said Thygesen.
So it seems that Russians can simply disregard the rulings of any court proceedings they don’t like, and proceed to issue whatever corrupt rulings they choose in their own courts in order to seize whatever assets may be of interest to them.
Thinking of investing in Russia, unwary forgeigner? Best think again!