UPDATE 2-Hungarian court rejects OMV's suit against MOL

(Adds court, OMV, MOL comment)

By David Chance

BUDAPEST, May 13 (Reuters) - A potential takeover by Austrian oil firm OMV of Hungarian rival MOL MOLB.BU that could be worth $20 billion received a fresh setback on Tuesday when a court in Hungary threw out a lawsuit it had brought.

OMV (OMVV.VI), which owns 20 percent of MOL, had sought to dismantle statutes which limit voting rights for holders of MOL stock.

The court said that the voting cap and rights associated with a voting preference share held by the government had been part of MOL's statutes for years and that the court only had the authority to rule on fresh changes to the statutes.

A rule which limits how many board members may be dismissed at one time was in line with the civil code, the court said, adding that it had no authority to consider whether it was in line with the Companies Act.

It said that if a shareholder suspected the rule was not in accordance with the act, they should have challenged it after the rule was passed, but no challenge was made.

MOL's stock was up 0.11 percent at 23,600 forints ($143) at 1254 GMT, off an early high of 23,760 forints.

It slightly underperformed a 0.75 percent rise on the wider Budapest Stock Exchange index .BUX.

OMV said after Tuesday's ruling that the court had made a decision based on procedure, not on the merits of the case.

"After receipt of the written judgement, OMV will consider taking further legal action including appeal against judgement and challenge of provisions in front of court of registration," it said in a statement.

Both the company and the Hungarian government have sought to impede OMV making a formal offer for MOL.

MOL said that it wanted the Hungarian suit dropped, although analysts say the merits of the deal are likely to be decided by the European Commission when it rules on whether the merged company would present competition concerns.

MOL and its allies have drawn criticism from minority shareholders for building a stake of over 40 percent in the company, effectively blocking minorities from being allowed to consider a 32,000 forint proposed bid for the company.

"The management has not allowed OMV to launch their takeover offer at 32,000 forints. MOL received help from local politicians who changed the law (right now any hostile takeovers are technically impossible in Hungary)," said Mark Mobius, who oversees over $40 billion in emerging market assets at Templeton Asset Management, in an emailed response to questions.

Templeton was one of the MOL stakeholders which was refused access to MOL's annual meeting last month as MOL said it had not completed the correct registration. (Additional reporting by Eva Komarek and Balazs Koranyi; Editing by Sue Thomas and Jason Neely)