An outbreak of peace has been reported in the long-running, multi-billion dollar feud involving Bermuda-registered investment fund IPOC and a rival for a near $4 billion stake in Russian telecoms company MegaFon.

However, the bitter dispute over who owns a coveted 25.1 percent share in MegaFon, a company worth an estimated $15bn, appears to be reaching a compromise conclusion.

Legal moves by Government to wind up IPOC, which was registered in Bermuda in 2000, remain ongoing according to a Finance Ministry spokesman yesterday.

An article in the London-based Financial Times newspaper reports that Altimo, the telecoms arm of Alfa Group which is controlled by the Mikhail Fridman, has signed a "peace agreement" with IPOC, which ends their battle over the disputed stake in Russia's number three mobile telecoms operator.

According to the report: "The groups agreed late last week after several months of talks to end all court actions and renounce legal claims against each other."

Altimo bought the MegaFon stake in 2003 from entrepreneur Leonid Rozhetskin. But IPOC launched a challenge claiming it had option agreements which pre-dated that deal and therefore it was the rightful owner of the stake.

Its claim involved dealings with Russian company CT-Mobile and British Virgin Island-incorporated LV Finance Group.

IPOC already owned 39.3 percent of MegaFon directly and through intermediary company Telecominvest. That stake is worth around $5.9bn.

What followed were numerous court and arbitration proceedings in Bermuda, Switzerland, Russia, Sweden and New York.

IPOC has, in the past famously, claimed it was the subject of James Bond-style espionage carried out in Bermuda by fake British and American secret agents seeking to get hold of sensitive financial details that were being audited on the Island by KPMG in Par-La-Ville Road.

According to the newspaper, neither company has commented on the deal, but it quotes "people familiar with the negotiations" as claiming Altimo keeps control of the 25.1 per cent MegaFon stake, while the deal will allow IPOC to negoitate a possible sale to billionaire Russian businesman Alisher Usmanoc, its own 39.3 percent MegaFon stake.

The deal clears the way for IPOC to negotiate the possible sale of its MegaFon stake to Alisher Usmanov, another billionaire Russian businessman.

Based on analysts estimates of MegaFon's market value, IPOC's 39.3 per cent is now worth about $5.9bn.

It is also thought the resolution of the dispute will allow a public offering of shares in MegaFon.

The Financial Times further reported: "The Alfa-IPOC battle generated particular controversy, as Alfa repeatedly alleged in legal action that Leonid Reiman, Russia's telecommunications minister, was IPOC's owner, and not its ostensible owner, Jeffrey Galmond, a Danish lawyer. Mr Reiman and Mr Galmond have denied the claims."

The newspaper noted that a Zurich arbitration panel said in May 2006 it believed IPOC's beneficial owner was an unnamed individual who "served as a high-ranking officer in the Russian Federation with the function of co-ordination and regulation" of communications".