MOSCOW, January 25 - RAPSI. On February 27, the Moscow District Federal Commerial Court will hear RosGas's appeal of a decision by the International Commercial Arbitration Court invalidating the sale of Hungarian gas distributor Emfesz for $1, RAPSI was told in the Moscow court Friday.

In 2009, Emfesz head Istvan Gozzi sold his company to the Switzerland-based RosGas AG for a token $1 without notifying Emfesz's actual owner. At the time of the transaction, Emfesz was wholly owned by Mabofi Holdings Ltd., which is controlled by Ukrainian businessman Dmitry Firtash.

Emfesz was purchased by Gozzi's deputy, Tamas Gazda, who at that time represented RosGas. The Hungarian courts then quashed the transaction in a number of litigations and the International Commercial Arbitration Court upheld their judgments.

According to RosGas, the ICAC's decision was not valid due to several procedural violations in the case.

RosGas launched the present appeal after the Moscow Commercial Court dismissed its application against the Cypriot Mabofi Holdings Ltd. last October.

RosGas stressed that the court went beyond the relevant parameters of the issue in question. Additionally, he said one of the arbitrators was involved in both the judicial and legal practice, which constituted a conflict of interest. The plaintiff also claimed that the ICAC did not pay due attention to Gozzi's position.

Meanwhile, Mabofi Holdings Ltd. argued that RosGas failed to explain which legal provisions it believed had been violated by the ruling, while the procedural violation claims did not stand up to criticism as there are no regulations prohibiting combining the legal and the judicial practice. The defendant said RosGas itself had nominated the judges for the hearing.

Mabofi Holdings Ltd. had wanted Gozzi to speak as a witness, but he did not appear before the court. The defendant's lawyer said the International Commercial Arbitration Court's decision did not affect Gozzi's rights and he was not obliged to take part in the proceedings.

After considering RosGas's application, the court did not find any grounds to dismiss the court ruling.

In January 2010, the Economic Department of the Budapest Metropolitan Court heard the case initiated by Mabofi Holdings Limited and invalidated the decision of the Hungarian Energy Office (MEH) made on April 29, 2009 which approved the sale of Emfesz to RosGas AG for $1.

In March 2011, the Administrative Department of the Budapest Metropolitan Court also invalidated the sale of Emfesz.

The court ruled that Gozzi did not have the authority to make the transaction and that he sold the company to his deputy, Tamas Gazda, without notifying the company's real owner.

Switzerland-based RosUkrEnergo AG, which is parity owned by Gazprom and the Centragas Holding of Dmitry Firtash and Ivan Fursin, was excluded from gas supply schemes after Gazprom and Naftogaz of Ukraine signed long-term contracts on January 19, 2009, following a three-week gas war.

Eventually, Emfesz, which supplied gas to Ukraine, Hungary, Poland and Romania, stopped receiving fuel from RosUkrEnergo AG.