The appeals bench of a Moscow court denied an appeal by Norasco Publishing., the publisher of The Russia Journal, Tuesday in a copyright case, forcing the newspaper to pay 516,000 rubles in damages to United Press, the publisher of The Moscow Times.

The company was appealing a ruling by a Moscow arbitration court on Oct. 31, 2002, which had awarded damages to United Press for a Times article alleged to have appeared on a Journal Web site in January 2002.

In the appeal, the company argued that no summons was issued to the correct address of The Russia Journal. According to court records, summons were sent to a legal address of Norasco in the Moscow suburb of Zelenograd, and were signed for. But when the court decision was sent to the same address, it was returned, citing as a justification that "the defendant was not found at the mentioned address." Norasco officials say they have no knowledge of the person who signed for the summons.

Court records also showed that Norasco was represented by a Mr. Daichenko at the hearing. Representing himself as under the Journal’s power of attorney, he pleaded no contest.

However, company officials say they never issued a power of attorney to anyone in connection with this case – and in fact never knew of the court date.

No copy of the document giving power of attorney was available in the court records. Norasco complained to prosecutors and police, seeking an investigation into the identity of Daichenko.

The claimant United Press had presented a computer printout as proof that article had been published on the Web site of The Russia Journal.

The appeals bench stated that the original judge had changed the order of Oct. 31, 2002, stating that in fact the decision had been taken ex-parte and no one had actually represented Norasco. However, under arbitration court regulations, the time in which an appeal could be made had passed because of the backdated change in judgment, and thus, no appeal could be heard.

Norasco was informed Jan. 10 by its bank that it had received correspondence from United Press’s bank asking them to pay 516,000 rubles, or just over $16,000, citing the court order.

The court order, passed in the absence of Norasco’s representative, sets a precedent for Internet and copyright law, with a court awarding damages without clear notice of a hearing and on the evidence of a single-page printout.

According to Norasco CEO Sandeep Goel, the penalty, as ordered by the court, will be paid in full.

"It creates a precedent – anyone can walk in with a printout of a Web site and claim a copyright violation. The court did not give us a chance to present our case. There are many things amiss. The court first said that someone by the name of Daichenko had represented us. When we registered complaints with police and prosecutors, it emerged that judge had changed his mind by that time. Now we are being told, ‘Sorry, no one represented you.’"

Goel said that he is not surprised. "We have seen worse dirty tricks from Independent Media for four years. This is exactly the kind of thing they are likely to use, and this case represents how the foundations of the judicial system remain weak."

Goel said this showed foreign corporations play in Russia by Russian rules and use the kind of underhanded tactics common in Russian capitalism.

Independent Media is also the publisher of Vedomosti – a joint venture publication between Independent Media, Dow Jones, the publisher of the Wall Street Journal and Pearson Inc., the publisher of the Financial Times of London.

Norasco is also contesting another case by The Moscow Times’ Andrei Zolotov Jr., the author of the said article.