Nov. 26 (Bloomberg) -- Mol Nyrt., Hungary’s largest refiner, said it’s seeking arbitration over claims Croatia breached its obligations related to the company’s investments in Croatian peer INA Industrija Nafte d.d.
Mol filed a request for arbitration proceedings at the International Centre for Settlement of Investment Disputes, accusing the government of “breaching certain of its obligations and undertakings in relation to Mol’s investments in Croatia,” Mol said today in a statement posted on the Budapest Stock Exchange website. Mol “remains open to further explore a negotiated resolution to the dispute,” according to the statement.
Tomislav Cerovec, a spokesman for the Croatian Economy Ministry, declined to comment on Mol’s statement.
Mol, based in Budapest, has been embroiled in a dispute with the Adriatic country after the Croat government claimed Mol bribed then Croatian Premier Ivo Sanader to attain management control over INA. A Zagreb court ruled Sanader received a bribe from Mol in the 2009 deal and sentenced him to 10 years in prison. Sanader is appealing. Mol has denied any wrongdoing.
Croatia issued an arrest warrant for Mol Chairman Zsolt Hernadi last month as it probes Mol’s 2009 acquisition of a controlling stake in the $7.3 billion unit.
Mol has legal obligations to its shareholders “to pursue good faith negotiations,” the company said. “However, it’s also under legal obligations to commence legal action to enforce its rights.”
Mol fell 4.6 percent today, pushing this month’s loss to 8.8 percent. INA shares have declined 2.8 percent this month.
Mol’s board gave authorized the start of preparations for the sale of the company’s stake in INA, Mol said Nov. 8. It also authorized the management to conclude an agreement with Croatia, it said.
The two parties have held talks seeking a negotiated solution. “There’re are still significant differences” between the negotiating parties, Mol chief negotiator Jozsef Molnar said after the latest round of talks on Nov. 8.
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