MOSCOW, February 21 - RAPSI. Billionaire Alexander Lebedev's National Reserve Bank (NRB) has appealed the dismissal of its lawsuit against the Federal Security Service (FSB) for $11.7 million in moral damages.

The bank appealed the decisions of the Moscow Commercial Court and appeals court. The hearing date has yet to be scheduled.

The defendant in the case is the FSB on behalf of Captain Volotovsky.

The bank believes Volotovsky distributed defamatory information about the bank in his report. Volotvsky stated that the NRB illegally drained funds from the Rossiysky Capital bank. In its suit, the bank demanded that the service publicly refute the information.

In November 2010, police officers searched the bank's head office and two subsidiary offices and seized their documents. The search was part of a criminal case on the embezzlement of 5 billion rubles ($160.61 million) allocated to bail out the Rossiysky Capital bank in 2008.

NRB uncovered that Volotovsky reported that "while pretending to perform the financial restructuring of the Rossiysky Capital bank, the NRB damaged the bank by replacing liquid assets with non-liquid assets that run counter to the lawful interests of Rossiysky Capital bank".

Investigators used Volotovsky's report dated October 8, 2010 to obtain the court order to conduct the search of NRB's office, the plaintiff said.

According to the NRB website, Lebedev owned a 76.27-percent stake in the bank as of June 6. VEB Capital head Yuri Kudimov owns 20 percent and the State Property Management Agency owns 2.99 percent. Lebedev said in late May that he was negotiating the sale of the controlling stake in the bank.