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File photo of Evgeny Pavlov entering court in Stockholm, Sweden.

Anna Tärnhuvud/Anna Tärnhuvud

A Swedish court has found Bombardier employee Evgeny Pavlov not guilty of “aggravated bribery” over his role in helping the Montreal-based transportation giant win a $340-million (U.S.) contract in Azerbaijan.

"The prosecutors have not proved that the charged person has promised or offered an inappropriate benefit," Stockholm's district court said in a judgment handed down on Wednesday.

"The prosecution against Evgeny Pavlov, as far as [proving he was] perpetrator of the bribe or aiding that crime, cannot be upheld," the Stockholm court said.

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Mr. Pavlov, who was facing up to six years in prison, is now free after spending six months in detention.

The ruling was focused narrowly on Mr. Pavlov's role in the founding of Trans-Signal-Rabita, Bombardier's local partner in a consortium that won a 2013 bid to install sophisticated train signalling equipment along the main east-west rail line in the former Soviet republic of Azerbaijan. It did not directly address other questions, including whether any bribe was paid to Bombardier's Russian partners on the project.

Still, the verdict was a relief to executives at Bombardier, a company besieged on several fronts, including the imposition by the U.S. government of duties of nearly 300 per cent on imports of its C Series airliners after a trade complaint by Boeing Co.

"We will review the ruling, but of course we are pleased with the outcome," the company said in a statement e-mailed to The Globe and Mail. "Bombardier had always denied any allegation of criminal wrongdoing, and we are happy to see the court's conclusions in this regard."

During the trial, defence lawyers argued that Mr. Pavlov – who testified that he was given the Azerbaijan assignment partly because he, as a Russian citizen, didn't need a visa to travel to the oil-rich republic, while his Swedish colleagues did – was too junior an employee to have participated in the complex bribery scheme alleged by the prosecution.

The court appeared to accept that argument. Its 75-page ruling made almost no mention of a central prosecution allegation that a Russian-controlled subcontractor, Multiserv Overseas Ltd., appeared to make an $84-million profit within the deal.

The National Anti-Corruption Unit is continuing its investigation into five other employees of Bombardier Transportation Sweden who were named in the evidence presented against Mr. Pavlov.

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The World Bank, which funded 85 per cent of the Azerbaijan project, is carrying out a separate audit of how the contract was awarded.

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