MOSCOW, July 10 - RAPSI. The Far Eastern Federal Commercial Court left in force the lower court decision, which dismissed Gazprombank's lawsuit to recover $98.37 million from Amurmetall, the court told on Tuesday.

Therefore the court of third instance dismissed the appeal by the bank.

The Khabarovsk District Commercial Court dismissed the bank's lawsuit last December. The decision came into effect in March.

The litigation arose after the parties entered into three loan agreements in 2005 and concluded two more in 2008.

Amurmetall entered into a settlement agreement with its creditors in December 2009 - including Gazprombank - as part of its bankruptcy case, initiated by the Khabarovsk Territory Commercial Court in June.

According to the settlement, the company agreed to repay its debt to the lenders based on the amortization schedule. The amount claimed by the bank under the bankruptcy procedure was equal to the amount claimed in its lawsuit.

The bank admitted in court that the settlement agreement was being implemented. However, the lawsuit did not aim to terminate the agreement, it said. Rather, the bank hoped to exercise the right to accelerate repayment if the security for the loans was not provided according to the agreement.

The bank believed there was a repayment risk given Amurmetall's financial and business condition. According to a due diligence report, Amurmetall failed to perform settlement provisions such as selecting traders through bidding and ignored tolling when selling products at market prices.

Amurmetall is the only Russian electrometallurgical works in the Far East. It melts down steel for bar-rolled stock and flat products. The company suspended production due to a lack of operating capital and the unfavorable global situation in May 2009. Although it resumed operations in July, it underutilized its capacities for a long period.