ANKARA, July 13: A Turkish court rejected on Thursday demands to scrap the sale of the majority stake in the national oil refiner TUPRAS, clearing a legal obstacle to one of the government's most ambitious privatisation projects, the Anatolia news agency reported.

The TUPRAS privatisation became a legal conundrum when a court ordered it be suspended in February, a week after a consortium of Anglo-Dutch energy giant Shell and Turkish conglomerate Koc had paid $4.14 billion (3.2 billion euros) in cash for a 51-per cent stake in the company.

The suspension was never put into effect, but Petrol-Is, the main trade union representing workers in the oil and gas sector, filed legal action to have the sale scrapped altogether on grounds that it was illegal.

The Council of State, the country's top administrative court, rejected the union's demands, ruling that the sale was legal, Anatolia said.

Petrol-Is has one more right of appeal against the ruling, the agency added.

Interventions by the courts have often snagged Turkey's privatisation program, a key element in a $10-billion stand-by deal with the International Monetary Fund.

In 2004, the Council of State cited breaches of law in a first attempt to privatise TUPRAS, nullifying the sale of a 65.76 per cent-stake to a joint venture between Germany-based chemicals company Efremov-Kautschuk GmbH, an affiliate of the Russia's Tatneft, and a Turkish company called Zorlu.

TUPRAS controls about 86 per cent of Turkey's refinery capacity and the total processing capacity of its six refineries is 32 million tons a year, according to company statistics.

It ranks itself the seventh-biggest refiner in Europe. —AFP