Kim Dotcom speaks during an interview with Reuters in Auckland
Kim Dotcom speaks during an interview with Reuters in Auckland January 19, 2013. REUTERS

New Zealand's Controversial web tycoon Kim Dotcom had a momentary fortune on Thursday when his US$42 million of assets belonging were unfrozen by a Hong Kong court. But the celebrations were short-lived as the money was immediately placed under a new restraining order.

The money was seized when Dotcom's venture Megaupload was shut down in 2012. At that time, Dotcom was living in Hong Kong and running the Internet file-sharing site Megaupload in 2005. He was indicted in the U.S. for alleged copyright infringement, and authorities seized the German national's funds, reported TV. Nz. But the High Court judge has ruled that the Hong Kong authorities, on behalf of the U.S, did not connvincingly report the details about the plans to seize Dotcom's assets, reported Bloomberg. Hong Kong High Court Judge Garry Tallentire, in his ruling, said it looked unintentional.

Legal Action

Dotcom and his associates took legal action against the Hong Kong government in October and appealed that the restraining order be set aside. They accused the secretary for justice of having failed to provide a "full and frank disclosure" of the facts when the application for seizure was made.

Dotcom's lawyers argued that the prosecution withheld an important information from the court while seeking the restraining order, including the fact that Megaupload could not be served with a criminal complaint in the United States as it was based abroad. Deputy High Court Judge Garry Tallentire then set aside the restraining order. But soon, in his own discretion, the judge re-instated the lock on Dotcom's assets. But that surely gave a breather for the Megaupload founder.

Since the original restraining order was granted ex parte, the defendants in the case were not allowed to present their side of the story. The new order empowers Dotcom's legal team to contest the asset freeze. The Judge also ordered the U.S. government to pay Dotcom's legal fees as he is fighting to get his assets unfrozen. Dotcom now faces an extradition hearing in June 2015, reported Torrent Freak News.

Small Victory

For Dotcom's lawyers, the Hong Kong court's ruling is a decent victory. "We are very pleased with court's decision, which vindicates Kim's position that he has been unfairly treated by the U.S. authorities," said John Rhie, a lawyer for the firm representing Dotcom. The ruling also gives Dotcom the hope of easing his financial woes. The web tycoon recently said he was broke, after spending millions of dollars to fight the cases against him.