Moscow Arbitration Court Rejects Sibneft's Yugraneft Debt Appeal

MOSCOW. (Interfax)- The Moscow Arbitration Court has rejected an appeal from Sibneft against a ruling to overturn a decision from a meeting of Yugraneft shareholders on August 1, 2005, Sibir Energy, the main Yugraneft creditor, said in a press release. The Moscow Arbitration Court also rejected a Sibneft appeal against a Moscow Arbitration Court ruling from September 8, 2005, which rejected a Sibneft request to suspend the Yugraneft external manager.

Consequently, a ruling was enforced confirming the illegality of decisions reached at a so-called 'meeting of Yugraneft creditors' initiated by Sibneft, the statement quoted Dmitry Afanasyev, who represents Sibir Energy, as saying. The legal external manager of Yugraneft is continuing to work to return assets removed by Sibneft and its affiliates, he said. Debt owed by Yugraneft to its shareholder Sibir Energy and its subsidiaries Magma and Evikhon amounts to 875 million rubles, Sibir Energy said in an October 5 press release.

This amount represents 96.7% of Yugraneft's total debt. A source in Sibir Energy told Interfax that the rest of the company's debt is owed to structures affiliated to Sibneft. Sibneft claims debts from Yugraneft of 684 million rubles. However, the Federal Arbitration Court for Moscow region on August 30 ruled in favour of an appeal by Sibir Energy to overturn a previous court ruling to include Sibneft's claim in the creditors' register. As a result, Sibneft's claim was removed from the register.

The press release said that on October 4, Moscow's Ninth Appellate Court rejected eight appeals by Sibneft against the earlier ruling of the Moscow Arbitration Court on June 14th, 2005. The Arbitration Court had ruled that Sibir, Magma and Evikhon are owed 875 million rubles ($31.25
million) by Yugraneft.

"In rejecting Sibneft's appeals the Appellate court re-affirmed that the Sibir Group is by far the largest creditor of Yugraneft thus safeguarding the status of the court appointed independent and external administrator," the statement said.