Croatia loses arbitration case against MOL over gas business
Croatia has lost an international arbitration case launched by Hungary's MOL over Zagreb's failure to adhere to obligations under an agreement concerning the gas business of the jointly-owned Croatian oil company INA, its government said on July 6.
While the Washington-based International Centre for Settlement of Investment Disputes rejected most of MOL's compensation claims totalling $1.1bn, Croatia will still have to pay some $184mn to MOL, the government said. MOL holds a 49% stake in INA, while the Croatian government owns just under 45%. The Hungarian company launched arbitration proceedings back in 2013, over Croatia's failure to take over INA's loss-making gas business and liberalise the gas market, which it had agreed to do in 2009.
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The government and legal experts are analysing the arbitration decision and will decide what further steps to take, Croatian prime minister Andrej Plenkovic told reporters after a session of cabinet, local media reported.
MOL and the Croatian government have been at odds for many years over management rights and investment policy at INA, and Zagreb has accused the Hungarian company of corruptly gaining virtual control of the jointly-owned firm even though it is not the majority owner. In 2016, an international body for commercial arbitration at the UN in Geneva ruled there was insufficient evidence to provide corrupt activities. Yet in December 2019, a Croatian court found MOL CEO Zsolt Hernadi guilty of bribing former Croatian prime minister Ivo Sanader in 2008 to allow MOL to become the key decision-maker at INA. It ordered his arrest in absentia.