A Moscow court on Monday returned the fraud case against Alexei Navalny to prosecutors after the defense indicated that it contained "numerous violations," Interfax reported, citing a lawyer for the opposition leader.
French cosmetics company Yves Rocher had accused Glavpodpiska, a company allegedly linked to Navalny and his brother, Oleg, of stealing 27 million rubles ($750,000) from it in a case viewed by some as the latest attempt to stop Alexei Navalny's anti-corruption activism.
Alexei Navalny last week posted a scanned copy of a letter from Yves Rocher on his blog purportedly showing that the company had retracted its initial allegation against him.
However, court proceedings are likely to continue, because a second company, MPK, has also filed a suit against Glavpodpiska.
A member of Navalny's Progress Party, Leonid Volkov, also wrote on his Twitter account last week that Yves Rocher had not formally withdrawn its complaint, despite sending the letter about the retraction.
Earlier this year, the former mayoral candidate was placed under house arrest and barred from using the Internet in connection with the case, a term that was last week extended by six months.
Navalny has been tried for fraud before. Last summer he got five years in prison for embezzling $500,000 worth of timber, but the sentence was later suspended.