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. Last Updated: 07/27/2016

Court Favors City in Sheremetyevo Battle

City Hall has won a court victory over the Moscow region's Khimki district in an ownership dispute over the lucrative plot of land under Sheremetyevo Airport's Terminal 2.

A Moscow arbitration court Friday upheld a suit brought by City Hall's land committee, which argued that a 1996 land-lease agreement between Khimki and state-owned Sheremetyevo was illegal.

City officials, who have been disputing the legality of the agreement in court since 1999, argued that the dispute itself is artificial because Sheremetyevo is located within the city of Moscow and not the Moscow region, the administrative region that surrounds, but does not include, the capital.

"The agreement is not valid and the court recognized it," said Vladimir Soldatenkov, the head of the land committee's legal department, in a telephone interview Monday.

Soldatenkov said that Soviet-era federal decrees in 1960, and a number of joint agreements between Moscow and regional authorities in 1961, stipulated that the airport falls under Moscow's jurisdiction.

Khimki administration officials, however, are adamant that the land belongs to them.

"The territory by all accounts belongs to the region and we have all the documents confirming this," said Marina Dunyushina, who heads Khimki's land department.

"Sheremetyevo Airport was developed on the territory of the region and included land from three districts — Khimki, Mytishchi and Solnechnogorsk — that were allocated during construction between 1954 and 1983," Dunyushina said.

She added that in 1983 Moscow city and Moscow region established the borders of the airport and all of its land transferred to the Khimki district.

Dunyushina said that changing the borders of districts within a given region was a normal practice, but changing the borders between two regions could only be done by presidential decree.

Dunyushina, who was in court Friday, said she couldn't comment on the exact ruling because she hadn't received the official decision in writing yet. She also said that the judge gave no explanation as to why Khimki's agreement with Sheremetyevo was declared invalid.

No one from Sheremetyevo Airport's management was available for comment Monday. The airport's spokesman for legal matters, Oleg Schenyov, declined to comment, saying that part of the documents on which the case rests are "classified."

Moscow Mayor Yury Luzhkov has long been trying to get control of the airport, going so far as to ask former President Boris Yeltsin to hand the airport over to the city so that he could personally oversee a much-need reconstruction — as well as the money it earns.

Although widely viewed as a valuable property, neither side of the conflict would comment on how much revenue it generates.

Currently, the airport pays Khimki for the land, while taxes on its activities are paid to Moscow itself.

Kommersant newspaper suggested Saturday that together those payments amount to $15 million a year.

An employee at the Khimki tax inspectorate who would not give her name contested the figure, saying that federal law exempts airports from paying land taxes.

The airport itself is a big earner as a company. It had a net profit of 673 million rubles ($27 million at that time) on turnover of 2.1 billion rubles in 1999, the last year information is available for.

Early last year, Sheremetyevo general director Sergei Sutulov forecasted at least a $42 million profit for 2000. But this figure could not be confirmed Monday.

Dunyushina said Khimki would appeal the court's decision.

Schenyov could not say Monday whether Sheremetyevo would do the same. "If an order from the top [management of the airport] comes we will do it," he said.

If there is no appeal within a month, Soldatenkov said, it becomes final.