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. Last Updated: 07/27/2016

Court Backs Lapshin In Kosmos TV Fight

A municipal court judge stunned the partners of Kosmos TV on Friday by upholding Alexander Lapshin as general director of the company and ordering the owners to pay him 13 million rubles ($2,203) in back wages.

Though owners of the cable television provider fired Lapshin on July 16, he has refused to step down, claiming his dismissal was illegal.

The Ostankino Municipal Court on Friday upheld for the second time Lapshin's claim, maintaining that the owners failed to notify him promptly of his dismissal or to give any reason for their action, both violations of Russian labor law.

"This is a farce," said Peter Kahelin, vice president of International TelCell Inc., or ITI, the American company that owns Kosmos in a 50-50 joint venture with Russia's Main TV & Radio Broadcasting Center, or GTsRT. Kosmos broadcasts cable programming like CNN and MTV into thousands of Moscow homes.

After the decision, a tired-looking Lapshin only said: "I await the next round."

Kosmos and Lapshin have been battling for control of the company since the dismissal, setting up separate offices and sending mixed messages to customers about where to pay their bills.

The case boils down to a clash between Russia's labor code, designed in part to protect employees from unfair dismissal, and the newer joint stock company law passed in January 1996, which attempts to protect companies from long, drawn-out dismissals which can wreak havoc on a company.

"As I was told by some legal officials, it is very hard for this court to understand new laws, specifically the Law on Joint Stock Companies," Kahelin said of the court's decision.

Despite Kahelin's views, one Moscow lawyer said determining which law takes precedence is a matter of interpretation.

"Joint stock company law says that a general shareholders meeting has the right to terminate the agreement of a general director, and that it takes precedence over the labor code," said Jean Brough, a lawyer with Baker & MacKenzie, Moscow. "But it is questionable that the joint stock company law can take precedence over the labor code. It's just not clear, and this is one court's interpretation."

Though Kosmos' partners argued that the company followed both laws in dismissing Lapshin, their lawyers argued in court that, under joint stock company law, Lapshin could be dismissed at any time for no stated reason.

Lapshin has maintained he was fired for uncovering the partners' plot to sell the Russian half of the company to the American half, an act he said would constitute theft of government property, since the Russian half is owned by the state and administered by GTsRT.

The Kosmos partners maintained in court that Lapshin was fired for failing to meet the company's growth plans and for damaging relations with Kosmos' programming suppliers.

Testimony given during the two-day hearing at times bordered on the absurd, and a court stenographer could not conceal her laughter when Kahelin's side had a Kosmos driver testify that Lapshin used office cars to haul building materials to his dacha.

But the partners were not laughing at the verdict.

Although the judge said the company could appeal the decision in a Moscow appeals court, it was a Moscow appeals court that reviewed the case in September and returned it to the Ostankino municipal court for a second hearing.

"Our hope would be that the appeals court will make a complete decision this time and not just bounce it back down again," Kahelin said.

Of immediate concern to the Kosmos partners is whether they can now gain access to their offices with Lapshin reinstated as general manager. The partners claim Lapshin has barred them from the building since July and refused them access to financial documents.