Debts row could sink relations between France and Russia

By CATHERINE FIELD

France is steeling itself for a row with Russia after French investors threatened to seize a Russian sailing ship over debts dating back to the Tsar.

The episode is the latest in a tale of bailiffs, courtroom dramas and political storms in which the bank accounts of the Russian Embassy were temporarily frozen and two Russian warplanes were impounded at the Paris Air Show, only to sneak off with the suspected connivance of the organisers.

The Sedov, reputedly the world's biggest tall ship, is due to dock at Marseilles next month on what is being billed as a goodwill mission by its 190 crew and sea cadets.

But instead of the local mayor, the first VIP stepping down the gangplank could be a bailiff if the Association Francaise des Porteurs d'Emprunts Russes has its way.

It is planning to have the four-masted, 117m, 3500-tonne vessel seized as part-repayment on loans made to the imperial Government before the 1917 revolution.

The Bolshevik regime ruled in 1918 that it would no longer reimburse the loans, a move that instantly destroyed their value except to collectors of fancy old documents. Then, in 1996, the post-Soviet Government agreed to partially indemnify holders of the certificates, earmarking in particular US$400 million for descendants of French investors.

The French association declared the settlement as "derisory" and "pathetic".

If it pushes ahead with its threat, it will be the second time that the Sedov will have been seized in France.

In 2000, lawyers representing a Swiss trading group called Noga, which claims it is owed US$800 million ($1.7 billion) from a food-for-oil bartering agreement with Russia, had the vessel seized while it was at Brest.

They also succeeded in freezing the bank accounts of the Russian Embassy in Paris, its trade mission in the French capital and its delegation to Unesco.

The ship was confined to port for 11 days but allowed to leave French waters after a court ruled that the owner, the State Technical University of Murmansk, could not be held liable for state debts.

The bank accounts were ordered unfrozen three months later.

The Russian Embassy accused the French authorities of "incredible violations of the law" and being guilty of "a very serious incident".

Even though Noga had sought execution orders in several countries, "it is only in France that the judges and bailiffs felt impelled to carry out this decision and that in conditions of doubtful legality", it noted.

It was not long before the next bout of friction. In June last year, Noga lawyers seized a top-of-the-line Sukhoi-30 warplane and a MiG-AT training fighter at the Paris Air Show, only to be thwarted.

Russia was clearly delighted that the planes were not seized, but the matter is unlikely to end there.

Noga has filed suit against two airshow companies whose employees, it says, physically grabbed a bailiff to prevent him from impounding the craft after he had shown them the seizure order.

The planes were then towed from the civilian zone of the Le Bourget airshow to its military zone, where the bailiff had no authority, and were immediately allowed to take off for home, according to the lawsuit.

A Paris court heard the Noga complaint last week and is deferring judgment until a later date.

Contrary to the allegations of the Russian Embassy, French courts are not known for their independence, and the sentence can be expected to be pronounced a conveniently long time after the feared showdown over the Sedov.