Minister of Economy and sustainable Development Tomislav Coric said late last year that the negotiations for the purchase of Hungarian MOL’s shares in Croatian oil company INA would be suspended until the end of the revision of the arbitration process, which will be initiated before the Swiss Supreme Court.
Namely, the Government instructed the Ministry of Economy to initiate a revision before the Swiss Federal Supreme Court of the ruling of the United Nations Commission on International Trade Law (UNCITRAL) from December 2016, as well as to continue with the activities in the arbitration initiated by MOL before the International Center for Investment Dispute Resolution (ICSID). Experts, however, are quite skeptical about the whole story.
Croatian arbitration expert Miljenko Giunio believes that the chances for a new arbitration procedure regarding management rights in INA
are small, although changes to Swiss federal law came into force earlier this year, bring the possibility of a revision in certain cases. However,
even if the revision of the procedure would be in favor of the Croatian side, it is questionable whether it would be a good move for the Croatian Government to regain majority ownership in the oil company.
Economic analyst and consultant Andrej Grubisic stressed that the state should not engage in this endeavor. There are number of reasons for this , but the most important is the fact that the state should not engage in entrepreneurship – the concentration of political power combined with political passions and populism can lead to bad decisions and their repercussions will be borne by Croatian citizens.
Former Minister of Economy and CEO of INA Davor Stern welcomes the decision of the Government to stop the buyback of INA shares from the Hungarian MOL. He also thinks that it is good that the contracts from 2009, which enabled MOL to manage INA as it wants, are being revised. He warns, however, that the legal battle will take a very long time and the question is what the final result will be. He warns that Croatia will have very little room for maneuver in the event that MOL owns more than 50 % of INA’s shares, regardless of the results of the revision.
MOL is the single largest shareholder in INA with 49.1 % of shares, while the Croatian Government holds 44.8 %. The remaining 6.1 % is held by private and institutional shareholders.
