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MOL makes progress in legal dispute with INA

Deals

The International Centre for Settlement of Investment Disputes (ICSID), in Washington, DC, made a preliminary ruling in favor of Hungarian oil company MOL, dismissing the objections of the Croatian government against the validity of the arbitration procedure the company initiated, Croatian daily Jutarnji List said on Monday.

Although MOL scored a small victory, the Croatian side is also happy, the paper said. Sources close to the Croatian government say they just wanted to buy more time to better prepare for the arbitration procedure, which initially caught them by surprise. The procedure was suspended for the time of the deliberation.

MOL alleges that the Croatian government breached some of its obligations and undertakings in relation to MOL's investments in Croatia, as it failed to take over Croatian oil and gas company INA's loss-making gas business, as stipulated in a shareholders' agreement.

The ICSID rejected the objections of the Croatian government against the procedure, but the decision is not final, these and other issues can be raised again at another time, Jutarnji List said.

MOL owns 49.08% of its Croatian peer INA, complete with management rights. The state of Croatia holds 44.84% of the company.

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