The INA-MOL saga continues.
A Swiss court has rejected a request for the annulment of arbitration proceedings which Croatia had launched against MOL and lost, reports Index.hr on October 27, 2017.
The court has also ordered Croatia to pay additional 200,000 Swiss francs of court costs and 250,000 francs of expenses of the other side in the proceedings, totalling about 2.9 million kunas.
In early February, Prime Minister Andrej Plenković confirmed that Croatia had requested an annulment of the arbitration decision in the INA-MOL case, adopted on 23 December 2016 by the Arbitration Tribunal at the United Nations Commission on International Trade Law (UNCITRAL) in Geneva, between Croatia and the Hungarian oil company MOL, which owns almost half of the Croatian national oil company INA.
At the time, the Prime Minister said that the government had “very well-substantiated arguments for the annulment of the arbitration decision, above all on procedural and legal grounds, and we hope that in the procedure which will last for several months, the Swiss Federal Court will consider them in an appropriate manner.”
Another arbitration between Croatia and MOL, at the International Centre for Settlement of Investment Disputes in Washington, is still ongoing.
On 12 January 2017, MOL published part of the UNCITRAL’s arbitration decision, saying that it had ruled that “all of Croatia’s claims have been rejected.” The claims involved the way INA is being managed by MOL and MOL’s alleged violations of the 2003 shareholders’ agreement. Croatia filed an appeal against the arbitration decision at the Swiss court, but that appeal has now been rejected.
The government has issued a statement about the defeat at the Swiss court. “On 26 October 2017, the government was informed by its legal representatives about the decision of the Swiss Federal Supreme Court, made on 17 October 2017, to reject the request of the Republic of Croatia for the annulment of the UNCITRAL’s arbitration decision. On 1 February 2017, the Republic of Croatia requested from the Swiss Federal Supreme Court to annul the arbitration decision. In the explanation of the decision, the Swiss Federal Supreme Court did not assess Croatia’s claims. Instead, the Court quoted parts of the contract between Croatia and MOL on the management of INA – which Croatia wanted to be annulled – which banned the possibility of subsequent rejection of possible arbitration decisions. Croatia initiated the arbitration proceedings against MOL in January 2014, with the request to annul contracts on the management of INA. The arbitration tribunal did not accept the Croatian request, and now the Swiss Federal Supreme Court has refused to annul the decision of the arbitration tribunal. That means that the existing framework of corporate governance in the largest Croatian oil company INA will continue.”
The government and MOL each own slightly less than 50 percent of INA and continuously argue how the company should be managed. In late 2016, the government announced its intention to buy back from MOL its shares of INA, but nothing much has happened in the meantime.
Translated from Index.hr.