The Russian judicial system isn't generally thought of as a venue for humor, but the laughs emanating lately from the small courtroom on the banks of the Moscow River where former Yukos CEO Mikhail Khodorkovsky is being tried would make any standup comedian envious. They erupt from the gallery, as if on cue, each time the state prosecutor, Valery Lakhtin, opens his mouth. Even if he weren't facing the intimidating task of prosecuting the country's most famous fallen oligarch, the gangly, intellect-challenged bureaucrat representing the Russian state would have a tough time. He appears to lack an understanding of the simplest economic principles -- not to mention legal arguments. Challenging an objection from the defense this week, he countered with the unimpeachable point: "Prosecutors can't lie!"

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The past week, however, after 16 interminable months of Khodorkovsky's latest trial, on charges of embezzlement and money laundering, saw some interesting developments. For the first time since the fallen mogul was arrested in 2003, top Russian officials have taken the witness stand. Even more striking is that their testimonies have supported Khodorkovsky's defense. The question on everyone's lips, then, is whether this is a sign that the Kremlin is softening its stance, or simply a new twist to Russia's most infamous show trial.

Khodorkovsky, one of modern Russia's original robber barons and the former head of Yukos, is nearing the end of an eight-year sentence on charges of fraud and tax evasion. Prior to his imprisonment, he was one of the wealthiest men in the world and a persistent thorn in the Kremlin's side, doling out tens of millions of dollars to opposition parties and pro-democracy organizations. In October 2003, however, he finally pushed then-President Vladimir Putin too far and was summarily arrested. Ever since, he has kept up a constant stream of criticism from his jail cell, corresponding with foreign and Russian journalists via smuggled letters. He is due to be released in October 2011 -- just five months before Russia's next presidential election. That might be a bit awkward, so he's now facing a further 22 years in a Siberian prison, accused of ordering the siphoning off of 350 million tons of oil and laundering nearly $25 billion in proceeds from 1998 to 2003.

Khodorkovsky, who maintains a six-person defense team but questions witnesses himself, frequently reminds the court that evading taxes (the first charge) on embezzled oil (the second) is not only illogical but impossible. The judge, like clockwork, strikes every such statement from the record.

On June 21, however, Khodorkovsky finally won a key argument when German Gref, the state-appointed head of Sberbank, Russia's largest bank, and long-serving economy minister during Putin's presidency, took the witness stand. Gref, associated with the "liberal" clan of the Russian elite that also produced current President Dmitry Medvedev, appeared at ease, tan, and calm, as he faced questions from Khodorkovsky.

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