Economy 23 April 2025, 8:38am

Mol wins long-running case vis-à-vis Croatia

Portfolio

Mol has won a significant legal victory against Croatia in a long-running lawsuit. The US court has ruled that the Croatian state must pay the Hungarian energy company $200 million (about HUF 71 billion), otherwise US enforcement proceedings against Croatian state assets could be launched, Telex reports.

The Easter period saw an important turning point in the decades-long legal battle between Mol and Croatia: a Washington court has rejected Croatia's appeal, and

the Croatian state is now obliged to pay the Hungarian energy company $200 million.

If Zagreb fails to comply, the US authorities can seize Croatian state assets in the US, including diplomatic mission accounts or even state aircraft entering US territory.

The roots of the conflict date back to the privatisation of the Croatian oil company INA in 2002-2003, when Mol acquired a minority stake in the company. The relationship between the two parties seemed to settle down in 2008-2009, when the Hungarian company was given control of the Croatian company, despite the fact that its ownership was less than 50%. However, the situation changed radically when there was a change of political leadership in Croatia. Former Prime Minister Ivo Sanader was dismissed, expelled from his party and prosecuted on corruption charges. The Croatian side subsequently challenged the contracts with Mol, and also sued Mol CEO Zsolt Hernádi, accusing him of bribing Sanader. Hernádi strongly denied the allegations.

While the investigation by the Hungarian Central Prosecutor's Office found no evidence of corruption charges, Croatian courts sentenced Hernádi, who has not been extradited by Hungary, to a custodial sentence with the force of law. In civil proceedings, both sides have taken legal action, with Croatia in Geneva and Mol in Washington.

The United Nations Commission on International Trade Law (UNCITRAL) has ruled in favour of the Hungarian side on all counts of the Croatian corruption charges. The International Court for the Settlement of Investment Disputes (ICSID), under the auspices of the World Bank, also found in favour of Mol, although it awarded only USD 200 million instead of the Hungarian company's claim of USD 900 million.

However, despite the judgment, Croatia has not paid, forcing Mol to initiate separate proceedings in the United States to enforce the judgment. Croatia's Večernji List reports that the US federal court, presided over by Judge Amir Ali, has rejected Croatia's appeal in its entirety.

Cover photo (for illustration purposes only): Portfolio