Washington, DC – A court of arbitration under the auspices of the World Bank – the International Centre for Settlement of Investment Disputes (ICSID), a court of arbitration under the auspices of the World Bank, has issued a ruling in the dispute between Hungarian petrochemical company Mol and the Republic of Croatia.
The court issued a 216-page judgement, and Mol has been awarded more than $235 million, including interest. The case has been in arbitration since 2013.
The central issue was Croatia’s allegation that agreements approved by the Croatian government in 2009 were obtained by corruption. Allegations of bribery and corruption wererejected by the Washington court, which has determined that neither Mol, nor its chairman and CEO Zsolt Hernádi, engaged in corrupt activities.
Over the eight years of arbitration, the tribunal reviewed key evidence, including that presented to the court in a recent trial in Zagreb leading to the conviction of Hernádi and former Croatian PM Ivo Sanader. Croatia argued in arbitration, as it did in Zagreb, that its evidence proved bribery and corruption. ICSID arbitrators unanimously disagreed with this claim.
The arbitrators found the testimony of Croatia’s key witness, Robert Jezic, to be contradictory, evasive and untruthful. The arbitrators also declared the testimony of Croatia’s other main witness in the Zagreb case, a Swiss tax advisor, was unreliable.
Croatia is a signatory to the international treaty that established ICSID, and therefore the arbitrators’ decisions are as binding as those made in Croatia’s own courts. In 2020, Sanader was sentenced to eight years in prison by the Zagreb Country Court for his role in another corruption case.