Croatia, Country lost another arbitration against MOL, SEE Energy News
Croatia has lost another arbitration case the International Court for Settlement of Investment Disputes (ICSID) in Washington regarding INA brought by the Hungarian oil and gas company MOL, in which MOL alleged that the Croatian Government did not honor its obligations from a gas business agreement.
Having lost the case, Croatia will have to pay 184 million dollars in damages, out of 1.1 billion dollars sought by MOL in the procedure. Croatia’s objections regarding corruption during MOL’s purchase of INA’s shares were rejected as well.
The arbitration procedure was launched in 2013 by MOL, which claimed that Croatia had not honored its obligations from a master agreement on gas business and its annexes.
Under that agreement, signed in 2009, INA was to divest a part of its gas business by having the state take over the underground gas storage facility at Okoli, which the state did, but it did not take over gas trading as well, which was the reason for MOL’s lawsuit.
This is the second arbitration case Croatia has lost to MOL. The first one was launched before the UN Commission for International Trade Law (UNCITRAL).
Hungarian MOL is the largest shareholder in INA with a 49.08 % stake, followed by the Croatian Government with 44.84 %. In late 2016, Croatian Government announced that it is going to buy back MOL’s shares in INA, however, their offer was rejected by MOL as too low.