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Court Rules Rosneft Not Liable for $340M Yukos Loan

Russia's arbitration court ruled that state-owned crude oil producer Rosneft was not obliged to repay almost $340 million in loans taken out by a unit of Yukos that it acquired after Yukos was forced into bankruptcy by authorities.

Once Russia's top crude producer, Yukos declared bankruptcy in 2006 after a multi billion-dollar back-tax claim from the state. Former Yukos owner and chief executive officer Mikhail Khodorkovsky is serving a prison sentence on fraud and tax evasion convictions. He is due to be released in 2016.

The court late last week deemed "null and void" loans that Yukos Capital, a former subsidiary of defunct oil firm Yukos, made to Yuganskneftegaz, the asset that was acquired by Rosneft as part of the Yukos bankruptcy proceedings.

"The verdict of the court of the first instance in Moscow … is hardly surprising given the track record it has in relation to cases featuring Yukos since 2004, which invariably results in judgments in favor of Rosneft, its shareholders or other state entities," said Claire Davidson, a spokeswoman for Yukos. "I am advised by our counsel that it is likely that an appeal will be filed."

A Rosneft spokesman declined immediate comments.

The case is related to loans Yukos Capital made to Yuganskneftegaz that were subsequently defaulted on. Yuganskneftegaz had been Yukos' principal production subsidiary, but it was acquired by state-run Rosneft.

Davidson also said that in a separate case, the Court of Appeal in London rejected Rosneft's attempts to obtain an order gagging a former Yukos group company from referring to a political campaign by the Russian state against Yukos and Khodorkovsky.

The ruling is a setback for Kremlin heavyweight and Rosneft's newly appointed head Igor Sechin, whom Khodorkovsky named as the man who masterminded the Kremlin's destruction of his Yukos business empire, which fell foul of Vladimir Putin during his first term as president.

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