Telenor’s ongoing legal battle with Russia’s Alfa Group took a dramatic turn this week, as a Siberian court froze Telenor’s stake in Russian wireless operator Vimpelcom after the Norwegian carrier refused to pay a US $1.7 billion claim that was ordered by the same court last month. Alfa and Telenor hold respective stakes of 44% and 29.9% in Vimpelcom, the second largest wireless firm in Russia. The dispute, which centers upon Vimpelcom’s 2005 takeover of Ukrainian RadioSystems (URS), is related to a second lawsuit that concerns Alfa’s and Telenor’s respective holdings in Kyivstar, a Ukrainian wireless operator and competitor of URS. Fairmex, a minor (0.002%) Vimpelcom shareholder, has accused Telenor of attempting to block the purchase of URS by subsidiaries owned by Alfa and has pursued claims against Telenor in the Russian court system. Charging that Fairmex is acting on Alfa’s behalf, Telenor sought redress before the U.S. courts on grounds that the transaction violated shareholder agreements and took place without Telenor’s consent. After ordering Altimo, an Alfa subsidiary, to adhere to an arbitration settlement that required the divestiture of its holdings in URS and in other rivals of Kyivstar, a New York district court held Altimo in contempt late last year for failing to obey the 2007 arbitration order. At the same time, a Russian appeals court dismissed a US $2.8 billion fine against Telenor that had been imposed by the Siberian court as it ordered a retrial in the case. That retrial ended last month, with the Siberian court ruling in favor of Fairmex and imposing a $1.7 billion fine. Although Telenor has appealed that ruling, the Siberian court nevertheless moved last week to freeze Telenor’s stake in Vimpelcom.