Hungary: MOL reveals details of INA arbitrage

, SEE Energy News

Hungarian oil and gas company MOL issued a statement which contains parts of a ruling by the Arbitral Tribunal of the of the United Nations Commission on International Trade Law (UNCITRAL) which dismissed Croatia’s claims against MOL regarding the managerial rights in Croatian oil company INA.

UNCITRAL dismissed Croatia’s request to nullify amendments to 2009 shareholders agreement on managerial rights in INA, as well as gas business master agreement, as the evidence presented was not sufficient to prove that the amendments were a result of corruption activities. According to MOL’s statement, after considering all of Croatia’s evidence and submissions on the bribery issue, the Tribunal has come to the confident conclusion that Croatia has failed to establish that MOL did in fact bribe former Croatian Prime Minister Ivo Sanader. Therefore, Croatia’s request to void the abovementioned documents due to alleged bribery has failed.

The statement explained that due to confidentiality rules of the arbitration the full ruling may not be published for now, but that MOL has to comply with the rules of the Hungarian capital market and the legal notice of the Hungarian regulator, according to which, MOL had to make publicly available some parts of the ruling, which are relevant for capital markets.

Croatian Prime Minister Andrej Plenkovic reiterated that Croatia will contest the UNCITRAL’s ruling, adding that there is also the other arbitration process under way in Washington. He said that he believes that Croatia should safeguard its interest by all legal means available and expressed hope for a broad political consensus in the country regarding the buyout of MOL’s stake in INA.

Hungarian oil and gas company MOL owns 49.08 % of INA’s shares, while the Croatian state has 44.84 % stake in the company. Croatian Government and Hungarian MOL have long history of dispute regarding the managerial rights in oil company INA, and both parties have initiated arbitration proceedings regarding the dispute before the International Center for Settlement of Investment Disputes (ICSID) in Washington and the United Nation’s Commission on International Trade Law (UNCITRAL) in Geneva.