The Hungarian oil and gas group MOL must act in the best commercial interests of INA, and in the event of any sale of its shareholding in the Croatian company it must ensure that the purchaser assumes MOL's commitments and bears the consequences of the Arbitral Tribunal's rulings, the Republic of Croatia and MOL said in a joint statement published on the Economy Ministry's website on Monday.
The Arbitral Tribunal, having reviewed the parties' written arguments and having heard the parties through counsel at a hearing in Paris on 11 August with respect to Croatia's application for interim measures, ordered "(i) that MOL must so exercise its various rights including relating to its shares in INA so as to ensure at all times that it acts in the best commercial interests of INA; (ii) that MOL ensure that in the event of any sale of its shareholding in INA it will procure that the purchaser undertake that as a shareholder of INA it will stand in the shoes of MOL and therefore bear the consequence of the present Tribunal's rulings with respect to the validity of agreements relevant to shareholder relations within INA."
The Tribunal, established under the rules of the United Nations Commission on International Trade Law (UNCITRAL), ordered Croatia and MOL to publish a joint statement in which they would undertake not to discuss this matter in public any more so as to avoid any contradictory statements in the media.
The Croatian government launched arbitral proceedings against MOL before UNCITRAL on 17 January 2014 after MOL initiated separate arbitral proceedings against Croatia before the World Bank's International Centre for Settlement of Investment Disputes on 26 November 2013.
The joint statement published on Monday says that on 30 June Croatia asked the Arbitral Tribunal to issue interim measures against MOL, including a temporary restraining order to freeze MOL's shareholding and to prohibit it from exercising its management control to reduce or close INA's refineries or reduce INA's workforce, or otherwise act against INA's business interests.
MOL resisted these measure but made no application of its own against Croatia, according to the joint statement.
The Tribunal rendered its Decision on Interim Measures dated 16 August 2014, in which it found that "Croatia had demonstrated its prima facie case on the merits, which means nothing more than that if, and only if, in the course of the arbitral proceedings Croatia will be in a position to prove its allegations against MOL, Croatia might prevail in this arbitration. That depends on whether the evidence presented by Croatia is accepted as probative."