Zsolt Hernádi, CEO of MOL Group.
Croatia has leveled false accusations against Zsolt Hernádi, MOL’s chairman and CEO; for the third time, it has been ruled that there was no corruption, the company announced Wednesday.
The statement also emphasized that MOL is fully complying with all obligations arising from the decision in accordance with the law.
Croatia was unable to prove that the Chairman and CEO of MOL Plc. had committed bribery. This is now the third international forum to reject the bribery allegations raised by Croatia, which had previously been rejected twice by the Swiss Federal Supreme Court and separately by INTERPOL, they noted.
The current ruling also centers on reservations regarding the credibility and reliability of the Croatian State’s key witness, Robert Jezic. With this decision, the court has once again overturned the previous ruling of the Croatian courts, which—relying largely on Jezic’s testimony—found Zsolt Hernádi and former Croatian Prime Minister Ivo Sanader guilty of corruption.
By rejecting the Croatian judgments, the arbitration court fully vindicates MOL’s position regarding the fabricated bribery charges, the Hungarian company emphasized.
They added, however, that in the same decision, the court rejected MOL’s claim for damages. This sets a precedent that sends a negative message to future foreign investors, MOL wrote.
MOL’s claim for damages stemmed from a breach of the first amendment to the Gas Framework Agreement (FAGMA), which was approved by the Kosor government to remedy Croatia’s prior breach of the 2009 Gas Framework Agreement (GMA).
As a responsible and law-abiding international company, MOL will fully comply with all obligations arising from the decision in accordance with the law, the company stated.
The Croatian State Attorney’s Office (DORH) announced Tuesday that Croatia had won a lawsuit against MOL Nyrt. in an arbitration proceeding in which the Hungarian oil company had sought 36.1 million euros in damages, and, in its secondary claim, had sought payment of 91.1 million euros in favor of the Croatian oil company INA.
According to a statement from the Croatian State Attorney’s Office, the arbitral tribunal, in its May 26 ruling, dismissed MOL’s claim against Croatia in its entirety, as well as all other claims, and ordered the Hungarian company to pay the Croatian State the administrative costs of the arbitral tribunal and the proceedings in the amount of €775,000, including interest.
Zsolt Hernádi, CEO of MOL Photo: MTI/Lakatos Péter
According to the DORH, the background to the recently concluded case was the investment arbitration proceedings before the International Centre for Settlement of Investment Disputes (ICSID), in which a decision was rendered in July 2022. At that time, the ICSID found part of MOL’s claim to be well-founded, but also stated that MOL could pursue its additional claim for damages arising from the alleged breach of the gas business agreement and its first amendment through commercial arbitration proceedings.
MOL initiated proceedings against Croatia at the ICSID in late 2013, claiming that Zagreb had failed to fulfill certain contractual obligations and commitments. In July 2022, the ICSID awarded $184 million of MOL’s $1.1 billion claim, and Croatia was also ordered to pay late payment interest and a portion of the proceedings’ costs.
MOL initiated the recently concluded commercial arbitration proceedings against Croatia in 2023. During the proceedings, the Hungarian company claimed that the Croatian State had breached the gas business agreement and its first amendment.
According to a statement from the Croatian State Prosecutor’s Office, the arbitral tribunal dismissed the claim in its entirety.
Via MTI; Featured image: X/MCC
