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In February 2005, Komienergo, JSC (a subsidiary of RAO UES) prevailed in the Arbitration Court of the Republic of Komi in its appeal against the Russian Ministry of Finance in a case involving the repayment of government loans and credits.  A commercial bank that is a successor to the Ministry was denied on its claim against the client for over 50 million rubles.

History of the issue:  The handling of the first disputes over government loans and credits was made more difficult by the fact that, in addition to the negative decisions received by clients at the trial or appellate level when they represented themselves, there was a dangerous precedent in a decision by the court in the Povolzhskiy Federal District, which was affirmed by the Supreme Arbitration Court of the Russian Federation, upholding the position of the Ministry of Finance.  When attorneys from Vegas-Lex became involved in the case, the negative trend was reversed.  Decisions by the Federal Arbitration Courts in the Volgo-Vyatskiy and Central Districts have created the opportunity to defend the interests of other energy companies and subsidiaries of RAO UES in similar situations by taking a careful and systematic approach to the lawsuits filed against them by the Ministry of Finance.  In December 2004, as a result of the successful work by Vegas-Lex to defend RAO UES at the appellate level in cases filed by the Ministry of Finance in various districts, the management of the company decided to centralize its defense against lawsuits by the Ministry of Finance by engaging the Vegas-Lex law firm to handle the consulting and litigation work in this area.  In Janaury 2005, the firm was another case on appeal in the Federal Arbitration Court for the Central District.