Government Seeking Settlement with MOL?

Total Croatia News

MOL has initiated proceedings in Washington to implement the Geneva arbitration decision.

Aware of its unenviable position in numerous proceedings against MOL, Croatia wants to find a kind of compromise with the Hungarian oil company regarding INA. According to media reports, initial contacts in this direction have already been realised. The government has decided to try to reach an agreement with MOL due to the loss of the arbitration proceedings in Geneva, but also because of other elements which put Croatia in a difficult position, reports Večernji List on November 13, 2017.

The main point of controversy between Croatia on one side and MOL and Hungary on the other is the status of Zsolt Hernadi, the CEO of the Hungarian company. Hungarian Prime Minister Viktor Orban has taken a firm stance from the outset that Hernadí should not be touched, which was further formalised by proclaiming him a person of national interest. Croatia, if it wants to improve relations, will presumably have to give up on Hernadi’s prosecution.

Of course, the question is how could the government formally guarantee that, since Hernadi’s prosecution is in the hands of Croatia’s supposedly independent judiciary.

Court proceedings against Hernadi and former Croatian Prime Minister Ivo Sanader, charged with corruption connected to the sale of INA’s management rights to MOL, should soon continue at the Zagreb County Court. However, it is hard to expect that the final verdict will be announced before the end of 2019 when the statute of limitations expires. That would put Croatia in an even more difficult situation.

The explanation of the verdict of the arbitration tribunal in Geneva shows not only that Croatia had lost the dispute, in which it argued that MOL had received management rights in INA due to a bribe given to Sanader, but also that the tribunal presented serious accusations against the Croatian judiciary, which is problematic for other disputes in which Croatia participates or will participate.

An additional element which puts Croatia in a difficult position is the second arbitration with MOL in Washington. According to the media, Robert Ježić, who was declared as a non-credible witness by the arbitration tribunal in Geneva with a series of contradictory statements, gave a similar testimony in Washington as well. He even allegedly admitted that he partially falsely testified at the court in Zagreb with the intention of improving his position in the legal process.

Also, MOL made another legal manoeuvre a week ago. At the Federal Court in Washington, it initiated proceedings for recognition and enforcement of the Geneva arbitration decision in the United States. In short, this would mean that the US judiciary would treat the Geneva decision as if a US court adopted it and that its execution would be subject to the American law.

Translated from Večernji List.


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