French court frees frozen Russian central bank fund

By Brian Rohan

PARIS, March 10 (Reuters) - A Paris court has lifted a freeze on Russian central bank funds held in a French account, ruling that they are exempt from seizure by a Swiss firm with a case against the Russian government. Trading firm Noga won decisions in January freezing Russian central bank assets held with a number of French banks, including 50 million euros ($77 million) held with Natixis (CNAT.PA: Quote, Profile, Research) and 50 million euros with Calyon (CAGR.PA: Quote, Profile, Research).

Noga was seeking reimbursement of debt from an oil-for-food deal struck in 1991-92.

But the March 7 appeal decision called for the immediate release of funds frozen in French bank Natixis (CNAT.PA: Quote, Profile, Research), citing a 2007 clause in the finance law which protects central banks from claims on governments if the banks are deemed independent.

"Assets owned by central banks are exempt from seizure... unless for example they default on commercial deals made in their own name," attorney Pascale Poupelin, who represents the Russian Central Bank, said by telephone over the weekend.

"Central banks are not responsible for claims on states."

The decision gives international back-up to Russian law -- under which the central bank is independent and not liable for sovereign debt -- in an area of sparse legal precedent and heavy financial manoeuvring in recent years.

While independent, the bank has been channelling a $157 billion fund earned from Russia's vast oil wealth into top-rated assets abroad, under a structure designed in 2006 to avoid legal actions similar to those launched by Noga.

Noga's lawyer Antoine Korkmaz has told Reuters he believed the Russian Central Bank was controlling such funds as a proxy for the government, making it fair game to his client.