Court Rules Against Sistema in Rosneft, Bashneft Dispute

Sistema JSFC (AFKS.MZ) said on Monday that a court of appeal has upheld a judgment against it in a dispute with Rosneft Oil Co. (ROSN.MZ) and Bashneft (BANE.MZ).

The court of appeal has ordered Sistema--and its subsidiary Sistema Invest--to pay Bashneft 136.27 billion rubles ($2.32 billion) for damages it suffered as a result of its re-organization in 2014.

Sistema--a Russian conglomerate--said that it intended to comply with the ruling, but said it would also dispute it by filing an appeal.

The companies are embroiled in a number of legal disputes over Sistema's stewardship of Bashneft in the period between when it acquired the company in 2009 until it was returned to state ownership by court decision in 2014.

Rosneft alleges that Sistema effectively stripped Bashneft of its assets leaving it unable to operate.

Sistema disputes this account, and says that it was restructuring Bashneft and preparing it for an initial public offering. It maintains that Rosneft and Bashneft are deliberately trying to bankrupt the company to enrich themselves.

Write to Carlo Martuscelli at carlo.martuscelli@dowjones.com

(END) Dow Jones Newswires

December 18, 2017 08:10 ET (13:10 GMT)