Feb. 27 (Bloomberg) -- UBS AG won a ruling in a Luxembourg lawsuit filed by Banca Intermobiliare SpA seeking to force the release of 5.1 million euros ($6.5 million) from an account belonging to a fund that had invested with Bernard Madoff.

A Luxembourg court said BIM’s claims were unfounded in an emergency ruling today. BIM argued UBS had a duty to pay it after sending the Italian bank a confirmation for a redemption request from the British Virgin Islands-based Groupement Financier fund made before Madoff was arrested Dec. 11.

Luxembourg’s financial regulator on Feb. 25 faulted UBS for inadequate due diligence in its role as a custodian bank for the Madoff-linked LuxAlpha Sicav-American Selection fund. While today’s decision was the first to deal with UBS as an account holder rather than as custodian, it may show that the regulator’s statement has “limited” influence on the courts.

“The legal effect in court of the content of such a press release is limited,” said Olivier Sciales, a Luxembourg-based lawyer with Chevalier & Sciales, who isn’t involved in the case. “A press release or circular issued” by the regulator “must limit itself so as to interpret the rules set out under the applicable Luxembourg laws, without being able in principle to create new rules.”

Other Cases

More than 10 Madoff-related cases are going through the Luxembourg courts, most filed by investors seeking repayments or documents on potential liability. Zurich-based UBS argues it can’t make payments on pending redemption requests as long as investigations into Madoff continue.

Karine Vilret-Huot and Olivier Rodesch, lawyers for BIM, couldn’t immediately be reached for comment. A spokesman for Turin, Italy-based BIM declined to comment.

UBS spokeswoman Tatiana Togni said in an e-mailed statement that the bank “took notice of the decision and welcomes it.” Judge Pascale Dumong also BIM to pay 1,000 euros in legal fees.

This is first of two cases to target UBS over payments from an account for Groupement Financier, a fund linked to Madoff. BNP Paribas SA, France’s biggest bank, asked a Luxembourg judge Feb. 20 for a court order forcing UBS to release 1.5 million euros from the account.

The local unit of UBS Fund Services confirmed BIM’s request for a redemption 5.1 million euros on Dec. 9, based on the fund’s net asset valuation of Nov. 17, according to Vilret-Huot.

UBS said at a hearing earlier this week that it had received BIM’s redemption request. Still, as a bank holding an account for the fund that had by Feb. 13 shrunk to about 255,000 euros, it wasn’t in a position comply, its lawyer Francois Kremer said.

Madoff was arrested on Dec. 11 at his Upper East Side apartment in Manhattan after allegedly confessing that he and his firm used new money to pay old investors in a classic Ponzi scheme. The investment adviser hasn’t formally responded to the one federal securities fraud charge now pending against him. He faces as much as 20 years in prison if convicted, and is free on $10 million bail. He has been ordered to remain in his apartment under house arrest.

To contact the reporters on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net; Heather Smith in Paris at hsmith26@bloomberg.net

Last Updated: February 27, 2009 06:22 EST