YUKOS: ARBITRATION COURT CANCELS BIGGEST BRANCH STOCK ARREST

MOSCOW, August 6 (RIA Novosti) - In today's session, the Moscow Arbitration Court considered a suit of the controversial Yukos petroleum mammoth, and qualified as illegal a move on which bailiffs had arrested the Yukos block of Yuganskneftegas shares, our correspondent reported from the courtroom.

The verdict enters into force immediately after it was announced, and may be appealed against within 30 days.

As we reported from a session of June 29, the Board of Appeal of the Moscow Arbitration Court confirmed a verdict for the Yukos to pay 99.342 billion roubles, roughly $3.4 billion, as back taxes for 2000. Bailiffs started proceedings the next day. Municipal bailiff Dmitri Borisov arrested the Yuganskneftegas block, July 14. The Yuganskneftegas is the largest Yukos oil-extracting affiliate.

Yukos lawyers doubted arrest legality, and so appealed to the Arbitration Court. As they were addressing today's session, the experts referred to the acting law on writ execution. As the plaintiff's principal oil-drilling branch, the Yuganskneftegas ought to be third on the order of priority in collecting the arrears. In compliance with the law, corporate money shall be first on that order, property outside basic corporate activities coming next.

More than that, the bailiff failed to check for his July 14 resolution whether the company possesses sufficient property to cover the arrears first and second on the priority order, pointed out the experts.

Next, they stressed, the Yukos offered its 20% block of the Sibneft-another petroleum mammoth-to cover the arrears. The bailiffs never gave a reply.

As he was addressing the court, in his turn, the bailiff alleged the arrest closely complied with the law and meant to protect the problem property. The service no longer intends to sell the Yuganskneftegas block but is collecting money from Yukos accounts, he added.

Tax Ministry spokesmen also found the arrest necessary. As ministerial lawyers presented the issue, the Yukos branches were arrested only after their registers were studied. The Yukos started paying sizeable sums as late as that, they emphasised.

The court found the plaintiff's arguments more weighty.

In a session of Monday, August 9, the Moscow Arbitration Court will consider legal compliance of the arrest of two other Yukos oil-drilling affiliates, the Samaraneftegas and the Tomskneft.