Sadko, owned by the Swiss firm Hopt-AG and Rosinvalyutorgom, appealed to the Russian tax office, which overturned the Moscow official's decision.
Alex Korneyev, director of Ma-TEC Juris, which represented Sadko, called the victory a precedent over "legal nihilism". In the future, low levels of the tax office would be less likely to make arbitrary decisions against basic laws on property and foreign investment.
Moscow tax authorities had confiscated the money in August on the grounds that Sadko had broken the terms of its joint-venture agreement and no longer had the percentage of foreign capital required to qualify for the lower tax rates enjoyed by joint ventures.
Under the agrement, Hopf-Ag was required to put up 14 million rubles of shareholder's capital. The tax office claimed that without amending the agreement, the money was withdrawn to pay for the construction of the new Sadko shopping arcade along the Moscow River behind the Mezhdunarodnaya Hotel.
In a formal ruling on Sept. 25, the Russian tax service accepted that Sadko-AG had actually varied its joint-venture agreement in 1991 to allow Hopf to invest 15 million Swiss francs in the new development. In so far as Hopf's money had been used to build the shopping complex, it was still a legitimate part of Sadko's capital, the ruling said.
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