Kommersant Loses Defamation Suit

The Moscow City Arbitration Court on Monday ordered the country's biggest business daily to print a retraction of comments made about state monopoly arms exporter Rosoboronexport in an interview with businessman Oleg Shvartsman.

The court also ordered Shvartsman, the head of little-known FinansGroup investment company, to pay damages of 30,000 rubles (about $1,300) to Rosoboronexport and the Kommersant daily to pay 20,000 rubles -- well below what the arms exporter had asked.

Shvartsman told Kommersant in November that he was working on the creation of a state corporation that might be affiliated with Rosoboronexport and would abuse its position, including legal authority, to force private businesses to sell themselves to state-controlled companies. He identified Rosoboronexport as one of the companies that would benefit from the scheme.

Rosoboronexport is the core company in major government-controlled industrial holding Russian Technologies, which is headed by Sergei Chemezov, a close friend of former-President Vladimir Putin.

The interview became one of the hottest topics in the Russian media and blogosphere, with a number of commentators pointing to it as evidence that people close to Putin were abusing their influence to acquire valuable business assets on the cheap for the state corporations they effectively control.

Rosoboronexport filed a defamation suit in December, demanding 50 million rubles ($2.1 million) from Shvartsman and another 30 million rubles from Kommersant for damages to its business reputation.

Valery Kartavtsev, head of public relations at Rosoboronexport, appeared for the company in court and said he was pleased that Judge Lyubov Barabanshchikova ruled that the Kommersant interview was defamatory.

Violetta Volkova, Shvartsman's attorney, and Georgy Ivanov, Kommersant's lawyer, maintained in court Wednesday that Shvartsman's remarks were not intended as statements of fact, but only his opinion. Only false information can constitute the grounds for libel under Russian law.

Shvarstman did not appear at Wednesday's session, although he was in Moscow, Volkova said.

Volkova and Ivanov said they would appeal the Wednesday decision.

Ivanov said Rosoboronexport should not have been awarded damages because it produced no evidence that its business reputation had been harmed in any way by the contents of the interview.

Asked how Rosoboronexport arrived at the amounts in its claims against Shvartsman and Kommersant, the agency's lawyer, Alexandra Fedorinina, said simply, "That's just what we decided."

Barabanshchikova said she ruled that Rosoboronexport had been defamed by Shvartsman because some of his statements were presented as facts.

In 2004, the Arbitrage Court of Moscow ordered Kommersant to pay more than $11 million in compensation for damage to the reputation of Alfa Bank, caused by an article that said depositors were lining up at bank branches to clear out their accounts.

A year later, the newspaper was awarded $10 million back, but was ordered to print a retraction. In protest, the paper ran the retraction alone in an otherwise blank issue.