Prime Minister Not Surprised by Withdrawal of Lawsuit in INA-MOL Case

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ZAGREB, December 20, 2018 – Prime Minister Andrej Plenković said on Wednesday he was not surprised by the decision by the Hungarian energy group MOL to withdraw its lawsuit against Croatia in INA-MOL case.

Asked by the press whether the move was a sign of goodwill or was connected with his recent meeting with Hungarian Prime Minister Viktor Orban, Plenković answered that “this decision was made well before the Hungarian prime minister’s visit to Zagreb.” “We are trying to resolve the accumulated problems which, because of the INA-MOL file, burden relations between Croatia and Hungary,” Plenković told reporters.

Asked why Croatia had still not bought back MOL’s stake in the Croatian company INA, given that he had announced this plan two years ago, and whether there was enough money for this given that contracts with consultants had not been signed yet, Plenković said that money and consultants were two different things.

“Consultants have been selected after several tenders. The dilemma here is who is responsible for what based on the tender issued. The government and the selected consultants have different opinions,” he said, adding that this was a technical issue which was being dealt with by two ministries.

Večernji List newspaper said on Wednesday that MOL had unexpectedly and without any explanation withdrawn its lawsuit against Croatia, filed with a Washington district court.

Last year the Hungarian company asked the US court to recognise and accept a ruling by the United Nations Commission on International Trade Law (UNCITRAL) in Geneva which two years ago ruled in favour of MOL and against Croatia. The lawsuit in that case was launched in 2014 by the Zoran Milanović government, and Croatia requested UNCITRAL to annul changes to a 2009 agreement on management rights in the INA oil company, jointly owned by MOL and Croatia, as well as a master gas business agreement, signed during the term of the Ivo Sanader government.

According to documents from the Washington court, MOL asked that the United States confirm, recognise and apply UNCITRAL’s final ruling of 23 December 2016, referring to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention, of which Croatia is a signatory.

This would mean that the US judiciary should treat the Geneva tribunal’s ruling as if it had been made by a US court and its enforcement was subject to US laws.

In the first version of its lawsuit, MOL also asked that Croatia should pay 14.5 million euro in costs it was ordered to pay by the court, which Croatia did, after which MOL confirmed that Croatia had settled the debt but not the interest and proceeded with the case.

The US court on 13 November 2017 informed the Croatian Economy Ministry that a lawsuit had been filed against it.

The penultimate document on this case from the US court was released on April 18, 2018, when Croatia was given an extension of the deadline until 28 September to prepare for the case, but five days before the deadline expired, on September 24, information arrived from the court that the plaintiff had voluntarily withdrawn the complaint, Večernji List says, stressing that MOL officials did not want to comment on the withdrawal of the lawsuit.

Many see the withdrawal of the lawsuit as a tactical move whereby MOL wants to additionally strengthen its position in ongoing arbitration proceedings it launched in Washington in 2013.

Croatia’s launching arbitration proceedings before UNCITRAL in 2014 was a response to MOL’s arbitration lawsuit.

Following the decision by UNCITRAL to dismiss Croatia’s motion to nullify the 2009 agreement on management rights in INA and the master gas business agreement, Prime Minister Plenković said that the government had decided to claim back full ownership of INA by buying MOL’s stake in it.

More news on the INA-MOL case can be found in our Business section.


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