RUSSIA - Kommersant Newspaper Faces $10m Bill For Defamation.

One of the country's most critical daily newspapers is hit with a record $10m legal bill after losing a defamation case against the country's largest private bank. The decision of the Moscow Arbitration Court to award the damages to Alfa Bank was immediately condemned as politically motivated by supporters of the Kommersant newspaper. Its owner, the exiled oligarch Boris Berezovsky who has become an outspoken critic of Pres Putin, criticised the decision and insisted he would continue to finance the newspaper. Kommersant, which periodically criticises the Kremlin and the government, has been owned by Berezovsky, the former politically influential business "oligarch" now in exile in London, since 1999. Alfa sued Kommersant after it ran an article in July on financial difficulties at the bank, which suffered a substantial run on deposits and contributed to a mini banking crisis over the summer. The case was the latest in a series of litigations which have threatened

Russia's fragile media outlets in recent years, forcing a number to close and dissuading journalists from writing critical articles. The weekly Novaya Gazeta previously set the record with $1.5m (1.2m, [pounds sterling]830,000) in libel damages, subsequently overturned. The head of the Centre for Journalism in Extreme Situations, Oleg Panfilov, said: "This is a political act. Kommersant is not a paper of opposition but with an independent stance. The authorities could not use the police so it was easier to use a legal action. I don't say this to defend Berezovsky, but because the paper is highly professional". Berezovsky said he believed the legal action had been instigated by principal owner of Alfa Mikhail Fridman, partly for personal reasons and partly as a sign of loyalty to the Kremlin. However, Fridman and other Alfa executives, who were obliged to inject nearly $1 bn to help temporarily support the bank during the summer crisis, have repeatedly stressed that they were simply fighting for the truth and defending their commercial interests. Alfa Bank itself put out a research note at the time of the crisis which highlighted financial problems at rival banks, including Guta, which subsequently suspended its services and was rescued after an intervention by the central bank. However, Alfa suffered considerably, if only because it was one of the most high-profile commercial banks with a broad client base. The editor of Kommersant Andrei Vasiliev, said that he would appeal the litigation because his journalists had simply reported the truth. He said his newspaper would not close as a result of the legal award, because it was financially healthy with a turnover of more than $60m. Berezovsky said that, if necessary, he would provide the financial support to ensure that it remained in business. He said representatives of the Kremlin had attempted to buy the newspaper as they had purchased his stake in ORT, the state TV channel. "I told them that Kommersant was not for sale".