PEACE has unexpectedly broken out in one of Russia's longest-running and most bitter boardroom battles. After five years, the notoriously sharp-elbowed Alfa Group has settled its differences with Telenor, a largely state-owned Norwegian firm that is its partner in mobile-phone ventures in Russia and Ukraine, called VimpelCom and Kyivstar respectively. Those will now be merged to form a company worth $24 billion; Telenor and Alfa Group's telecoms arm, Altimo, will have stakes of about 38% each in the merged entity. Telenor's shares jumped 15% on the news, and financial analysts hailed the deal as a boost for Russia's reputation. In reality, it shows how limited the options of persecuted foreign investors in Russia are.

The duo had been at loggerheads since 2004, when Altimo suggested that VimpelCom take over a Ukrainian rival to Kyivstar. Telenor demurred, saying the price was too high. Altimo retaliated with a string of lawsuits, to which Telenor responded in kind.

Then a company called Farimex, which owns a 0.002% stake in VimpelCom, joined the fight. It complained to a court in Siberia that Telenor's stance had done VimpelCom grave commercial harm. The court ordered Telenor to pay compensation of $2.8 billion, a sum that was reduced to $1.7 billion on appeal. Telenor refused to pay, whereupon the courts seized most of its 30% stake in VimpelCom. In June bailiffs ordered the stake auctioned to pay the compensation, without setting a date. Norway's government protested vehemently to Russia's throughout, to no avail.

The planned union of the two firms is contingent on all these legal problems evaporating. But it is hard to see how Altimo can guarantee that, since it maintains that it has no connection to Farimex beyond sympathy for its cause. Even if the deal goes ahead, there is also no certainty that further disputes between Altimo and Telenor will not arise. The pact gives the two firms three nominees each on the merged firm's nine-person board, alongside three independent directors. But equal representation on the board of TNK-BP, a Russian oil firm, did not prevent a falling-out between its shareholders, AAR, a Russian consortium that included Alfa Group, and BP, a British oil firm. They have been debating who should run the firm for years.