An appeal court in Uzbekistan has reversed a controversial earlier court ruling that allowed the state to seize control of Uzdunrobita, the MTS-owned local mobile operator.

However, the Appeal College of the Tashkent Criminal Court has fined MTS US$600 million for alleged tax evasion in the country and upheld prison terms imposed on four Uzdunrobita managers.

“We are contented that the MTS arguments during the court processes were heard and partly satisfied,” MTS CEO Andrei Dubovskov said in a statement last night following the ruling, reports Reuters.

MTS had its Uzbek licence suspended by local Uzbek authorities in July, ostensibly for non-payment of taxes and licence violations – effectively cutting-off service to its 9.5 million customers.

The operator claimed it had been the target of “blatant harassment by Uzbek government authorities with the thinly-veiled purpose of destroying the business and expropriating its assets.”

The situation was responsible for MTS booking a US$1 billion impairment charge in its Q2 results, and also led to parent group Sistema reporting a net loss in the period.

While yesterday’s ruling means MTS will have its assets returned it remains unclear if it will be able to re-launch operations.