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Russian opposition leader Alexei Navalny attends an appeal against his jail for repeatedly violating laws governing the organisation of public meetings and rallies, at Moscow city court in Moscow, Russia October 6, 2017. REUTERS/Maxim Shemetov

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STRASBOURG, France (Reuters) - Europe's top human rights court ruled on Tuesday that Russian opposition leader Alexei Navalny's conviction for fraud in 2014 had been "arbitrary and manifestly unreasonable" and ordered Russia to pay him compensation.

"We have won. Thanks everyone for support," tweeted Navalny, a campaigner against corruption among Russia's elite who hopes to run against Vladimir Putin in a March election. Putin is widely expected to seek and win a fourth term as president.

Russian authorities have three months to decide whether to appeal against the ruling by the European Court of Human Rights (ECHR), the TASS news agency cited Russia's deputy justice minister and ECHR representative Mikhail Galperin as saying.

"We proved that this case was a fabricated one, and that this ugly buffoonery in the court room in 2014 had nothing to do with a fair legal proceeding," Navalny wrote on his website, www.navalny.com, after the court announced its ruling.

A suspended jail sentence in a separate case -- which Navalny says was politically motivated -- may still bar him from running for president.

The Strasbourg-based ECHR said Navalny and his brother Oleg's convictions for fraud and money laundering were based on an unforeseeable application of criminal law and that the proceedings were arbitrary and unfair.

"I am glad that justice was done," Navalny wrote.

He said the case against him had been staged to thwart his anti-corruption and political activities through the pressure put on him and his family.

"When thieves and swindlers in power declare that I cannot run (for president) because of 'the law', 'the sentence', because (I am) 'a criminal' and 'recidivist', we can show them with confidence what they will never have -- a decision by a true, fair court," he wrote.

"It is clearly written there that the law and the right are on our side. It's them who are criminals, not me."

Navalny and his brother were convicted in December 2014 of money laundering and defrauding their business partners. Navalny was given a suspended sentence of 3-1/2 years and his brother a prison sentence of the same length. The Navalnys lodged a complaint with the ECHR in January 2015.

The ECHR ruled that Russia must pay Navalny and his brother 10,000 euros (9,112 pounds) each for non-pecuniary damage, plus costs and expenses of 45,000 euros for Alexei and 10,971 euros and 460,000 roubles ($8,000) for Oleg.

In another case which Navalny says was a Kremlin attempt to prevent him standing for election, a Russian court in February found him guilty of embezzlement in relation to a timber firm called Kirovles and gave him a five-year suspended sentence.

It was the second time the case had been heard, after the ECHR said Navalny's right to a fair hearing had been violated and ordered a retrial.

(Reporting by Gilbert Reilhac; Additional reporting by Vladimir Soldatkin in Moscow; Writing by Dmitry Solovyov; Editing by Catherine Evans)

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