Customs agents seized the 17-metre "La Petite Ourse II" on March 21 after its owner, Alexey Kuzmichev, one of the main shareholders of Russia's Alfa Bank, was sanctioned by the EU for his ties to President Vladimir Putin.
The Rouen appeals court ruled that customs officers had not followed correct procedures when they boarded the vessel, which was moored at Cannes on the Cote d'Azur.
His other yacht, La Petite Ourse, which is moored in nearby Antibes and was also seized in March, was released in October after a similar ruling by the Paris appeals court.
Customs agents in both cases had cited fraud investigations when they presented themselves to shipyard authorities, which under French law permits customs to search a vessel but did not apply in this context.
According to his lawyer, Philippe Blanchetier, Kuzmichev has not used La Petite Ourse since the first ruling in October and wanted to sue the French authorities to win back access to both boats in order to make a point, not to go out to sea.
"We want the respect of the law. We cannot take measures against countries, saying rights are not respected, and then not respect the law (ourselves)," he said.
The ruling underlines the challenges faced by European nations in freezing the assets of Russian oligarchs.
The customs agency did not reply to requests for comment immediately.
(Reporting by Layli Foroudi; editing by Richard Lough and Nick Macfie)
