Zagreb Commercial Court turned down on Friday a motion filed by Belgrade-based Jugobanka bank which asked for over €23 million to be paid by Croatia for Yugoslav-era loans which had been issued by Jugobanka from 1985 to 1989 to three Croatian companies.

Jugobanka, which is currently in receivership, claimed in its filing that the loans, used by the 3. Maj shipyard, the Varteks clothing factory, and the Duhan newspaper and tobacco retail chain, were being repaid now to the Paris Club group of Yugoslavia’s creditors by Serbia instead of Croatia.

The lawsuit, filed in 2009, said that Jugobanka based its claim on the succession treaty to the former Yugoslavia and its provisions regulating the servicing of loans and other liabilities from agreements with the governments of the Paris Club member countries.

In its reply to the lawsuit, Croatia’s state prosecutor said that Croatia is not obliged to repay loans contracted by Jugobanka based in Belgrade nor its local branches in Croatia.

The Zagreb court ruled that although the end users of loans for which Belgrade-based Jugobanka had borrowed funds abroad were based in Croatia, that does not mean that Croatia is now obliged to pay back the funds to the Paris Club. The decision can be appealed.

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