Arbitration Hearings Start Over Control of INA

Croatia and the Hungarian energy company MOL started an arbitration process before the International Chamber of Commerce in Paris on Monday over the management rights of the Croatian energy company INA.

INA’s two biggest shareholders, MOL, which holds 49.08 per cent of the shares and the Croatian state, which has 44.84 per cent, are in dispute over the number of members of INA’s executive and supervisory boards.
Although MOL does not have more than 50 per cent of shares, it holds the majority of seats on both boards.

This arbitration process, launched by Croatia in January, follows the latest breakdown in negotiations between the two sides two weeks ago.
Negotiations have gone through five stages since mid-September 2013 without success.  

The Croatian government team wants to prove that the shareholders’ agreement, with its accompanying rights, is illegal and is the product of the corrupt actions of Croatia’s former Prime Minister, Ivo Sanader, and MOL’s management.

The crucial argument for their side is the recent final judgment by the Croatian Supreme Court in June, which found Sanader guilty of bribery, which Croatia says proves their point.

The arbitration panel consists of the chair, a British judge Neil Kaplan, and
Jaksa Barbic and Jan Paulson, from Croatia and Hungary respectively. They will decide on the Croatian government’s request for more management rights.

If the Croatia wins the case, the shareholders’ agreement will be voided and management rights will turned over to the Croatian state.

Croatian Economy Minister Ivan Vrdoljak, who was present for the first session of the arbitration session in Paris, said he was “satisfied with today’s hearing”...