The Supreme Court of Slovenia confirmed an earlier ruling of a Ljubljana county court which had rejected a request filed by the food company Agrokor for the so-called Lex Agrokor special law to be recognised in Slovenia, the court said on Monday (March 19).

The special law, which was swiftly passed in Croatia and came into effect in April 2017, allowed for the management of the privately-owned debt-ridden food conglomerate to be temporarily taken over by a government-appointed crisis manager. It also prevented company’s creditors to seize any of its assets before a debt settlement with both its suppliers and creditors is reached.

However, the special law – which was passed to prevent a disorderly bankruptcy of the biggest company in the country which employed some 60,000 people in the region and accounted for 15 percent of Croatia’s economic output – needs to be recognised by courts in other countries where Agrokor holds assets.

Although county court in Slovenia’s capital Ljubljana first recognised provisions of the law as part of a foreign company insolvency procedure in June, it overturned its ruling after accepting an appeal by Russia’s Sberbank. Sberbank is Agrokor’s biggest single creditor, owning around 1.1 billion euros of the company’s debt, and launched a series of legal actions against the troubled company in countries where it owns property.

The Ljubljana court ruled that the special law was opposed to Slovenian legislation as it does not treat all creditors equally, a decision later confirmed by Slovenia’s supreme court.

As a result, Sberbank could try to target Agrokor’s property in Slovenia, which primarily includes the large retail chain Mercator, which is considered the most valuable part of the conglomerate. In addition, courts in Bosnia and Serbia, where Agrokor also owns valuable subsidiaries, also rejected recognising Croatia’s special law.

A London court, however, recognised the legitimacy of the special law, which dealt a blow to Sberbank’s legal challenges against Agrokor, and which forced the bank to return to the negotiating table on the final debt settlement, as the settlement is expected to be completed sooner than Sberbank could acquire Mercator or any of Agrokor’s properties in other countries.