The opinion of the court was delivered by: David G. Trager, United States District Judge.
In December of 1998, plaintiffs Films by Jove ("FBJ") and Soyuzmultfilm
Studio ("SMS"*fn1) (collectively, "the plaintiffs" or "the third party
defendants") brought this action for copyright infringement, breach of
contract, unfair competition and RICO violations against Joseph Berov,
Natasha Orlova, Rigma America Corporation and the St. Petersburg
Publishing House and Group (collectively, "the defendants"). On May 4,
1999, this court issued a preliminary injunction on consent of the
defendants restraining them from reproduction of any motion picture in
which plaintiffs own the copyright. On August 10, 2000, plaintiffs moved
to hold the defendants in contempt for violating and continuing to
violate the court's injunction by selling copyrighted material allegedly
belonging to the plaintiffs*fn2 out of their St. Petersburg
House retail stores in Brooklyn. A hearing on that motion was held on
August 17 and August 18, 2000, but the issue was left undecided, and the
hearing was adjourned until October 10, 2000 after it became apparent
that a third party, the Federal State Unitarian Enterprise Soyuzmultfilm
Studio ("FSUESMS" or "the third party plaintiff"), would be intervening
in the lawsuit as a third party plaintiff, seeking declaratory and
injunctive relief necessary to secure its right of operative management*fn3
of the copyrights to the films at issue, which, it claimed, were
owned, strictly speaking, by the Russian government.*fn4 On October
10, 2000, the contempt hearing was continued. The defendants, at that
time, conceded a violation of the injunction in the event that the
plaintiffs do, in fact, possess the copyrights to the animated films sold
by the defendants.
This same question of copyright ownership is now before the court. The
plaintiffs have moved for summary judgment on this issue, and FSUESMS has
cross-moved for summary judgment on its own claims to the copyrights.*fn5
The final resolution of the plaintiffs' contempt motion hinges on the
disposition of the question of copyright ownership.
The parties agree that in 1936, the Soviet government expropriated from
the Russian Orthodox Church the premises of the Church of St. Nicholas
the Enlightener in Moscow, Russia and founded there a state enterprise*fn6
called Soyuzmultfilm Studio,
which, from 1936 until the present, created
about 1500 animated motion picture films, many of which became extremely
popular.*fn7 See Mem. Law. Supp. Pls.' Mot. Dis. 3D Party Compl. Pursuant
to FRCP 12(b)(6) [hereinafter "Pls.' Mot. Dis."] at 2; Notice of Mot. to
Dismiss 3D Party Compl. Pursuant to FRCP 12(b)(6) [hereinafter "Pls.'
Not. Mot. Dis."] at 2. From 1936 to 1989, Soyuzmultfilm Studio, like
virtually all enterprises in the Soviet Union, operated as a state
enterprise. See Pls.' Mot. Dis. at 2. Unfortunately, as far as the
history of Soyuzmultfilm Studio goes, the parties agree on little else,
although their disagreements, as the patient reader will discover, are
either disputes as to issues of law or disputes about facts that are not
dispositive on any of the issues resolved in this opinion.*fn8
According to plaintiffs, on December 20, 1989, as part of the ownership
liberalization trend that accompanied Glasnost and Perestroika,
Soyuzmultfilm Studio became a "lease enterprise" or "rent entity."*fn9
See id. at 2-3. "Many state companies became rent enterprises in the
late 1980s and 1990s. In accordance with law, they stopped to be
`state-owned', but having in mind a further transition to privately held
companies, they acquired another legal status, taking on lease only state
buildings and equipment, but keeping their income and products for
themselves and thus they received freedom from the state." Pls.' Ex.
15, Decl. of Mila Straupe [hereinafter Straupe Decl."] ¶ 11. The
lease enterprise, operating under a ten-year lease agreement concluded
with the Soviet State Film Committee known as Goskino,*fn10 paid rent to
the state for facilities and equipment, while the copyrights to the
films, which, in the plaintiffs' version of the story, originally
belonged to the state enterprise, passed by operation of law from the
no-longer-existent state enterprise Soyuzmultfilm Studio to the
identically-named rent enterprise that took its place. See id. at 3;
Pls.' Response to Def.'s and Third
Party Pls.' Jnt. Statement Pursuant to
Local Rule 56.1 [hereinafter "Pls.' 56.1 Resp."] ¶ 32; Straupe
Decl. ¶ 12.
On July 1, 1999, shortly before the lease was due to expire, the rent
entity Soyuzmultfilm Studio was again reorganized, this time into a
private joint stock company.*fn11 See Straupe Decl. ¶ 12. That
corporation, still named Soyuzmultfilm Studio, became the lawful
successor to all of the rights and obligations of its predecessor,
including, according to plaintiffs, all copyrights and trademarks. See
id. The joint stock company, however, did not incorporate into its
institutive capital the state-owned material assets, e.g., premises,
equipment, furniture, etc., that had been leased to the rent enterprise
by Goskino, and those state-owned assets reverted to the state upon the
expiration of the lease term. See id. Accordingly, the joint stock
company relocated in 1999 from its old offices in the Church of St.
Nicholas the Enlightener to a new office in Krasnogorsk, a Moscow
suburb. See id.
From the early nineties on, the lease enterprise and SMS, its
successor, have had "to put up with a fight in Russia once spearheaded by
Goskino and now [Soveksportfilm] and the State Property Ministry to take
control of the films produced by the studios of Russia during the USSR."
See Sept. 22 Borsten Decl. ¶ 6. The rights of the lease enterprise
Soyuzmultfilm Studio and its successor, the joint stock company SMS,
among other studios, were vindicated in various court decisions, see
Decl. of Rimma Erokhina, Ex. 6, attached to Decl. of Julian Lowenfeld,
most definitively in a June 19, 1996 decision of the Commercial Court of
Paris, which ruled for Soyuzmultfilm Studio, Mosfilm Studio, Lenfilm
Studio and Films by Jove and against Soveksportfilm, finding that
economic legislation passed by the USSR in 1986 and thereafter had put an
end to the state monopoly on foreign trade, and Soveksportfilm could no
longer license films produced by Russian film studios without the
agreement of the studios, which were the rightful copyright holders.
See Ex. 14, attached to Decl. of Julian Lowenfeld. The French court
noted a series of under-the-table transactions that Soveksportfilm had
engaged in in order to transfer to itself, without consent, rights to 125
films owned by the studios.*fn12 See id.
Around the same time that SMS was leaving its Church of St. Nicholas
the Enlightener location, then-Prime Minister Sergei Stepashin,
responding to the demands of Goskino and a faction of approximately fifty
people displeased with the leadership of a certain Mr. Skuliabin (spelled
elsewhere as "Sculabin"), the director of the lease enterprise
Soyuzmultfilm Studio as of 1993,*fn13 issued a decree recommending the
creation of a new state enterprise for the exploitation of the Church of
St. Nicholas facilities vacated by the joint stock company. See Pls.'
Mot. Dis. at 5; Pls.' Ex. 17 (hereinafter "Stephashin Order"); Tr. of
Hearing on Aug. 17, 2000 at 20; Decl. of Vitoslav Shilobreev attached to
FSUESMS's Order to Show Cause.*fn14 On October 11, 1999, that faction
of SMS officers who had been unsuccessful in their attempts to be elected
to SMS's governing board proceeded to register the newly-organized
"Federal State Unitarian Enterprise Soyuzmultfilm Studio."*fn15 See
Meanwhile, the Russian Orthodox Church had initiated a lawsuit to
the property that had been expropriated from it in 1936. See
id. According to the plaintiffs — and, it should be reiterated,
everything discussed heretofore and postdating the creation of the lease
enterprise is the plaintiffs' version of the facts — FSUESMS,
faced, by virtue of the Church's claims, with the loss of its only
assets, viz., the premises and their facilities, decided to make a
unilateral claim that it, and not the joint stock company SMS, was the
"real" Soyuzmultfilm Studio. See id. To accomplish this end, FSUESMS,
working closely with Goskino and the State Ministry of Property, see
Sept. 22 Borsten Decl., advanced the contention that the lease enterprise
Soyuzmultfilm Studio either had never existed or, at the very least, had
not taken possession of anything other than the material assets of the
state enterprise Soyuzmultfilm Studio and further, that the state
enterprise had continued to exist in a latent, non-functioning form
during the entire pendency of the lease (1989-1999). See Straupe Decl.
¶ 15. FSUESMS then, instead of attempting to register as a new
company, requested to register as an amended form of the non-existent
state enterprise Soyuzmultfilm Studio. It proceeded to request to
register amendments to the extinguished charter of the state enterprise
Soyuzmultfilm Studio, which had ceased to exist in 1989. See id. ¶
16. These amendments were mistakenly and illegally registered by the
Moscow City Registration Chamber in October of 1999. See id. ¶ 17.
Thus, by the close of 1999, two independent enterprises, SMS and FSUESS,
were both registered by the government and both claimed to be the
rightful heirs of the state enterprise Soyuzmultfilm Studio and its
extensive film library.
So much for the plaintiffs' version of Soyuzmultfilm Studio's colorful
history. The defendants and FSUESMS offer a fundamentally different
account.*fn16 According to them, the copyrights in the films made by
the state enterprise Soyuzmultfilm Studio belonged at all times to the
Soviet state and were merely under the operative management of the state
enterprise Soyuzmultfilm Studio. See Mem. Law. Opp. Mot. for Partial
Sum. J. by Pls./3rd Party Defs. and Supp. Cross-Mot. for Sum. J. by 3rd
Party Pl. [hereinafter "FSUESMS's Cross-Mot."] at 2. The state
enterprise administered those copyrighted films on behalf of the state
and Goskino, the state agency responsible for managing the funding for
state film production. See id. at 3.
The creation of the lease enterprise Soyuzmultfilm Studio in 1989 as
part of the restructuring of the Soviet economy did not terminate the
existence of the state enterprise Soyuzmulfilm Studio. See id. at 4.
Rather, the state enterprise had suspended film production during the
period of the lease. See id. The lease itself, entered into with the
lease enterprise Soyuzmultfilm Studio by Goskino, as the funding entity
for state-owned film assets, transferred to the lease enterprise only
material assets, viz., the premises and equipment, located at the site of
the Church where the state enterprise had heretofore been active. See
id. at 3. The copyrights to the state enterprise's film library
continued to be owned by the state. See id.
At this point, the narratives of the parties begin to converge. A
series of lawsuits ensued between SMS and FSUESMS, with each trying to
nullify the registration of the other. Although the validity of corporate
registrations and not the ownership of copyrights was the central issue
being decided, some of these cases found occasion to address the
possession of the copyrights in the state enterprise Soyuzmultfilm
Studio's library. The decisions of lower courts,*fn17 which ruled in
favor of SMS, found that the right to the copyrights in the films and
trademark in the name Soyuzmultfilm Studio, among other intangible
assets, passed to the lease enterprise by operation of law and was
legitimately transferred to the joint stock company SMS when the lease
enterprise sold its assets to that newly-formed entity prior to the
expiration of the lease term. See June 5, 2000 Decision, Ex. 19,
attached to Decl. of Julian Lowenfeld [hereinafter "Jun. 5 Dec."]; June
24, 2000 Decision, Ex. 20, attached to Decl. of Julian Lowenfeld
[hereinafter "Jun. 24 Dec."]. In addition, these decisions found no
connection between the 1936 State Enterprise Soyuzmultfilm Studio and its
purported 1999 resurrection in the form of FSUESMS. See id.
Accordingly, the FSUESMS's registration was cancelled. See id.
The lease enterprise "Studio Souzmultfilm" [sic] was
established on the basis of a rent agreement without
the right to purchase all the property of the
enterprise, which was state-owned. Moreover, the
composition and the quantity of the property subject
to be rented out was not identified, because the
transference-acceptance act was never recorded and
documents listing the property were never produced.
In the process of transferring the leased enterprise to a joint-stock
company it was necessary to separate the property of the enterprise from
the property owned by the state and include in a separate balance sheet.
Furthermore, the separate balance sheet was worked out independently by
the leased enterprise, without the participation of the owner, who leased
out the enterprise. This balance was then not presented to the owner for
The Court when settling the dispute did not consider the fact if the
act of transference can be considered accurate, which defined the size of
the Charter capital of the joint-stock company and identified the size of
the property owned by the state. The issue is if the leased enterprise
has the right to independently and without the approval of the property
owner to transfer according to the act of transference to the joint-stock
company the property that does not belong to it. The Court also ignored
The decision reached by the Court that the Charter capital did not
include state-owned property was based on incomplete evidence.
The conclusions of the Court that the property acquired in 1990-91
was not state-owned was not based on factual evidence.
Importantly, on September 19, 2000, the Higher Arbitrazh Court of the
Russian Federation denied SMS a further appeal at the current time but
instructed, for the purposes of remand, that the August 18, 2000 opinion
of the Federal Arbitrazh Court for the District of Moscow, quoted above,
is not a binding view of the evidence in the case, and the lower court
should allow SMS to argue its position on remand. Arifulin Letter, Ex.
7, attached to Decl. of Paul Stephan.
On remand, the Moscow Region Arbitrazh Court issued an opinion on
December 26, 2000 in the suit by FSUESMS, the Ministry of State Property
of the Russian Federation and Goskino against SMS. That opinion, by and
large, reinstated and expanded upon the earlier lower court findings:
According to Article 486 of the RSFSR Civil Code which
was in effect at the time of the transformation of the
state enterprise, "Film Studios Soyuzmultfilm" into a
lease enterprise with the identical name, the
copyrights to a film belong to the enterprise that
shot the film.
Therefore, copyrights to animated films created by the state enterprise
"Film Studios Soyuzmultfilm" were transferred by operation of law to its
successor — [l]ease enterprise "Film Studios Soyuzmultfilm." A
lease enterprise with an identical name became the successor of rights of
the state enterprise "Film Studios Soyuzmultfilm" according to the
existing laws, i.e., Article 16 of the. . . Fundamental Principles [of]
[L]egislation and Union Republics on Lease.
Copyrights were not and could not be transferred by the lease agreement
because they had been transferred by operation of law and cannot be
limited by an agreement.
Therefore, the copyrights of the lease enterprise are not related to
the issues of the lease agreement, and the expiration of that agreement
does not cause the copyrights of the [l]ease enterprise "Film Studios
Soyuzmultfilm" to expire.
At the time of the transformation of the [l]ease enterprise into a
[shareholding] company[,] the lease enterprise had the copyrights to its
animated film[s] by law.
Pursuant to Article  of the RSFSR Civil Code, copyright in the
animated feature films belonged to "Film Studios Soyuzmultfilm" and not
to Goskino USSR or any other representative of the state.
According to RSFSR Article 496 the copyrights to the animated feature
films made by "Film Studios Soyuzmultfilm" belonged to the Studio without
time limit, and upon its reorganization, the copyrights went to [l]ease
enterprise "Film Studios Soyuzmultfilm" also with no term limitations.
Thus Goskino of the Russian Federation could not have transferred
copyrights of the animated movies of "Film Studios Soyuzmultfilm" to the
Lease Enterprise for lease because Goskino never had those rights to
[FSUESMS's] argument that the copyrights to the animated films belong
to [it] has no foundation, based on the submitted documents and oral
arguments of both sides in the lawsuit, because, pursuant to Articles
23, 37 of the RSFSR Civil Code and Article 11 of the Fundamentals of
Civil Legislation USSR and Republics, a state enterprise, after leasing
out an enterprise and complex of facilities and property, could not exist
anymore, and could no longer be a legal person at the same time because
it did not have its own property and legal capacity.
When leasing out an enterprise (state property) [takes] place in
accordance with paragraph 4, Article 16 of the Fundamental Principles on
Lease, which established full succession of rights to the state
enterprise assumed by the [l]ease [e]nterprise, then according to Article
37 of the RSFSR Civil Code[,] this action shall constitute an actual
reorganization of a state enterprise. Dec. 26, 2000 Dec., Ex. 8, attached
to Decl. of Paul Stephan [hereinafter "Dec. 26 Dec."].
The December 26 decision was affirmed on appeal on January 22, 2001.
However, on April 20, 2001, well after the motion in this case had been
submitted, the Federal Arbitrazh Court for the District of Moscow, the
same court that had earlier remanded the case, issued a ruling
overturning the December 26, 2000 and January 22, 2001 decisions. See
Apr. 20, 2001 Ruling
[hereinafter "Apr. 20 Dec."], attached to Aff. of
Vladimir Zlobinsky of May 9, 2001.
That ruling began the core of analysis by noting that Article 59 of the
Civil Code of the Russian Federation provides that the act transferring
property from one owner to another is the document that "defines the scope
of rights and obligations being transferred to the respective recipient
of rights." Id. at 5. But, in this case, because that transfer document
is signed only by the deputy director of the lease enterprise and not
signed at all by the general director of the joint stock company, it is
"not deemed [to be] indisputable evidence establishing succession rights"
from the lease enterprise to the joint stock company.
Accordingly, the court goes on to analyze the transfer in more detail:
At the time of the creation of the leased enterprise
"Film Studio Soyuzmultfilm" on the basis of the assets
of the film studio, no determination was made as to
the specific property to be transferred for lease and
no property transfer and acceptance act was made.
Therefore, it is impossible to determine which
property was leased, and therefore impossible to
determine the rights of the leased enterprise in
respect of the state property subsequently transferred
to the joint stock company.
According to paragraph 1.2 of Charter of the leased enterprise the
leased property remains property of the state. It is being utilized by
According to Article 295 of the Civil Code of the Russian Federation an
enterprise has no right to sell the real property it is utilizing, to
lease it . . . or to otherwise dispose of it without the owner's
Therefore, the court's conclusion that the property transfer act is not
subject to approval by the State Property Ministry, which acts for the
property owner, is not based in law. The consent of the owner of state
property was never obtained[;] the evidence is missing in this case.
Therefore, the leased enterprise, in violation of the aforementioned
legal requirements, disposed of the state property by transferring it to
the joint stock company.
Id. at 6. The court went on to nullify the joint stock company's
registration. See id. at 7. As yet, although SMS represented at oral
argument that they are appealing the decision to the Higher Arbitrazh
Court of the Russian Federation, see Oral Arg. at 66, there has been no
word about whether that court will accept the appeal or what the result
of any such appeal will be.
However, this situation was significantly complicated by the other
series of decisions in the case, the opinions on remand in the suit by
SMS against FSUESMS. On January 25, 2001, the lower court refused to
nullify FSUESMS's registration and found that
the succession of rights of the lease enterprise from
the state enterprise, as stipulated in Item 4, Article
16 of the Fundamentals of USSR law "On Leasing,"
arises not as a result of the conversion of the state
enterprise into the lease enterprise, but by the
operation of the agreement on lease of the property
complex which definition is given in Article 132 of
the Civil Code of the Russian Federation. Because the
succession of rights is based on the lease agreement,
it has a temporal nature and is restricted by the
terms of such agreement. The succession of the lessee
from a state enterprise can not continue after
termination of the lease agreement because the lessee
in this event, in accordance with Article 664 of the
Civil Code of the Russian Federation, is obliged to
the leased property of the state. In this case
the term of the agreement on the lease of the property
complex of the state enterprise expired on December
Discussion of January 25, 2001 decision within Decision of April
3, 2001, Ex. B, attached to Decl. of Anya Zontova, at 2.
On appeal, the conclusion of the January 25, 2001 decision, viz., that
the registration of the FSUESMS was not to be nullified, was upheld, but
the appellate court, in a decision issued on April 3, 2001 specifically
took issue with the bases for the January ruling:
After examining all the case materials, including the
arguments of appeals claims and listening to the
representatives of the appellants participating in the
case, the Appeals Court concluded that the Lower Court
rightfully denied to satisfy the demands of the
appealed claims[. H]owever, the Appeals Court cannot
agree with the conclusions by the Lower Court in its
decision denying the appeal. Thus, the Appeals Court
considers as wrongful the Lower Court's statement that
the succession of rights of the lease enterprise that
was based on the lease agreement, has a temporal
nature and is restricted by the term of such
agreement. The Lower Court's conclusion does not
comply with the law which was in effect at the time of
concluding the agreement on the lease of the property
complex of the state enterprise of December 20, 1989
Item 4, Article 16 of the Fundamentals on Leasing stipulates that a
lease enterprise becomes the successor of material rights and obligations
of the state enterprise leased by it, including its right to use land and
other natural resources.
After signing the agreement, the organization of lessees receives in
the established order the property of the state enterprise and acquires
the status of a lease agreement.
The fact of signing the lease agreement determines the formation of a
lease enterprise. As it takes place, the activity of the state
enterprise ceases through the conversion resulting from the formation of
a lease enterprise on the basis of a state enterprise (Article 16 of the
Fundamentals on Leasing.)
Thus, after signing the agreement of December 20, 1989 by the USSR
State Committee on Cinematography and the labor collective of [the state
enterprise Soyuzmultfilm Studio], the activity of the state enterprise
. . ., created by decree #246/001 of June 10, 1936, ceased. By operation
of law, the successor of rights of this enterprise became the lease
enterprise [Soyuzmulfilm Studio], which later was converted into the
joint stock company [Soyuzmultfilm Studio] and continues to be such at
the present time.
The Lower court's conclusion about the resumption of activity of the
state enterprise [Soyuzmultfilm Studio] after the lease agreement ended,
and returning to it the rights and obligations which have been passed on
to the lease enterprise is erroneous, because the existing law does not
stipulate the implementation of such a legal construct.
The succession of rights is tightly linked with the legal capacity of a
legal entity. It is an integral property of a legal entity, not of a
leased property complex. Therefore when the property is returned after
the agreement ended, there is no automatic return of the succession of
rights and obligations.
The Appeals Court, however, went on to conclude that although SMS
inherited the rights of the state enterprise after the expiration of the
lease term, this did not mean that FSUESMS was invalidly registered.
"The registration of the newly formed [FSUESMS] does not violate the
Plaintiff's civil rights and interests protected by law," the court
wrote. Id. at 5. FSUESMS's charter, the court found, did not
specifically stipulate that it had inherited the rights of the state
enterprise Soyuzmultfilm Studio, and a mere reference in Item 1.1 of that
charter to the Order of 1936, which had created the state enterprise
Soyuzmultfilm Studio, was not grounds to invalidate the registration.
That decision, in turn, was appealed to the Federal Arbitrazh Court for
the District of Moscow, the same court responsible for the April 20, 2001
reversal of lower court rulings in the suit brought by FSUESMS and others
against SMS. This time, however, in a decision issued on June 4, 2001,
the court affirmed the decision below. It summarized the holding below
The Appeals Court has established that on December
20, 1989, the labor collective of the state enterprise
[Soyuzmultfilm Studio] concluded the agreement with
the USSR State Committee on Cinematography on the
lease of the state enterprise property (case file
30-33, Vol. 1) after the signing of which, the
activity of the state enterprise [Soyuzmultfilm
Studio], created by decree of No. 246/001 of June 10,
The successor of rights of this state enterprise by operation of law
became the lease enterprise [Soyuzmultfilm Studio,] which later was
converted into the joint stock company [Soyuzmultfilm Studio].
The succession of rights, in the opinion of the Appeals Court, is
tightly linked with legal capacities of a legal entity. It is an integral
property of a legal entity, not a leased property complex. Therefore when
the property is returned after the agreement ended, there is no automatic
return of the succession of rights and obligations.
However, the act of the registration by MRC of the [FSUESMS] on
November 10, 1999, disputed by the Plaintiff, in the Appeals Court's
view, does not violate the rights and interests of the Plaintiff, because
the [FSUESMS] is a newly formed entity on the basis of the state property
and does not affect the civil rights of the [joint stock company
Soyuzmultfilm Studio] and its interests protected by law.
June 4, 2001 Dec., Ex. A, attached to Decl. of Anya Zontova
[hereinafter "Jun. 4 Dec."] at 2-3.
The FSUESMS, according to the court, appealed the ruling in order to
alter what the court described as "the motivational part" of the ruling,
id. at 3, in other words, the reasoning underlying the decision, while
SMS appealed the ruling that had allowed FSUESMS's registration to
stand. See id. The court refused both appeals:
The case materials show that on December 20, 1989
between USSR State Committee on Cinematography
(lessor) and the labor collective of "Kinostudiya
Soyuzmultfilm" (lessee) the lease agreement was
concluded, under which the film studio were given for
a lease use, for the term of 10 years, the main and
circulating assets (equipment, appliances and other
commodity and material assets) which were in the film
studio's balance sheets at the moment the agreement
became effective, as well as the monies received from
the centralized sources of funding under the plans of
major construction work and material and technical
procurement for the 12th and 13th five-year periods
(Items 1.1, 5.6 of the Agreement). Pursuant to Item
1.2 of the Agreement, the leased property remains
state property and in the economic management of the
lessee. As this took place, the composition and the
quantity of the leased property was not determined,
because the receipt and transfer acts were not
executed, and the documents identifying that property
were not made.
The executive committee of the Moscow Sverdlovskiy regional council
registered by the Decision of November 14 1990 the Charter of the lease
enterprise [Soyuzmultfilm Studio] which was adopted on January 4, 1990 at
the conference of the film studio labor collective.
Item 4, Article 16 of the Fundamentals of USSR law "On Leasing"
stipulates that a lease enterprise becomes the successor of property
rights and obligations of a state enterprise that was leased by it,
including its rights to dispose of the land and other natural resources.
Thus, the Appeals Court has made the rightful conclusion that after
signing the lease agreement, the activity of the state enterprise
[Soyuzmultfilm Studio] created by decree No. 246/001 of June 10, 1936
On October 11, 1999, a new legal entity was formed, the [FSUESMS].
This enterprise was created on the basis of the Order of the Russian
Federation Government of June 30, 1999 No. 1038-R (Vol. 1, case file 80)
in connection with the expiration in December 1999 of the term of the
December 20, 1989 agreement with the labor collective of [Soyuzmultfilm
Studio], on the lease of the film studio's assets which were in state
Pursuant to Article 13 of the Civil Code of the Russian Federation, a
non-normative act of a state body or a local government body is subject
to being invalidated by the court in the event this act simultaneously
does not comply with the law or other legal acts and it violates a legal
entity's rights and interests protected by law. The court fully and
thoroughly investigated the circumstances of the case, evaluated in the
aggregate the arguments collected regarding the case, and came to a
rightful conclusion that the registration of the newly formed [FSUESMS]
does not violate the civil rights and interests of [SMS] protected by
In the Charter of the newly formed enterprise, the succession of rights
from the state enterprise ...