The Hungarian oil company MOL on Thursday reacted to the 11 October ruling of the Swiss Federal Supreme Court that dismissed the Croatian application for a review of the 2016 arbitration award, saying that all courts and investigators, except those in Croatia, had reached the same conclusion -- there was no corruption.

The Federal Supreme Court of Switzerland, in its ruling of 11 October 2022, dismissed Croatia’s review application in respect of the ruling by the United Nations Commission on International Trade Law (UNCITRAL) in the dispute between MOL and the Croatian government, awarding CHF 250,000 to MOL. Similarly to its ruling of 2017, the Federal Supreme Court, in its ruling of 11 October 2022, confirmed the legality of the UNCITRAL ruling, without allowing a review, MOL said.

Based on the Swiss Court ruling, the agreements between MOL and the Croatian government relating to the corporate governance of INA, including the First Amendment to the Shareholders’ Agreement, the Gas Master Agreement and the First Annex to the Gas Master Agreement, signed in 2009, remain valid and binding on both parties, the Hungarian company said.

The UNCITRAL ruling of 2016 clearly states that it was not possible to determine corruption in the process of acquisition of management rights over INA. All courts and investigating authorities, except those in Croatia, came to the same conclusion: corruption did not happen. As for proceedings in Croatia, even the Croatian Constitutional Court found serious breaches of rights, MOL noted.

The Hungarian company recalled that in February 2022, Croatia requested a review of the UNITRAL ruling, issued in the arbitration case which Croatia initiated against MOL in 2016. The ruling rejected the Croatian allegations of corruption and found that the corporate governance of INA was lawful and that MOL was meeting all its contractual obligations.

Croatia’s review application was based on a conviction of corruption brought by the Croatian Supreme Court in 2021.

In July 2022, the International Centre for Settlement of Investment Disputes (ICSID), a Washington-based arbitration institution of the World Bank, issued its final ruling, agreeing with the UNCITRAL ruling that Croatia had failed to prove its allegations of corruption in this case, while the key witness was found to be devoid of any credibility, MOL said.

During the nine-year-long arbitration process, ICSID reached a unanimous decision based on testimonies by dozens of witnesses and tens of thousands of pages of documents, it added. ICSID also ruled in favour of MOL on a Croatian government decision of 2014 concerning INA’s gas business, awarding $236 million in damages to MOL, the Hungarian oil company said.