Arbitration cases against Croatia on Swiss franc credit conversion suspended

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July 5, 2021 – Four arbitration cases brought by banks against Croatia before the International Center for the Settlement of Investment Disputes (ICSID) related to the conversion of loans into Swiss francs were suspended on June 30, the government and ten banks said in a joint statement. on Monday.

The cases concerned the amended Law on Consumer Credit and the Law on Credit Institutions, whereby loans denominated in Swiss francs were converted into loans denominated in euros or kuna. The transformation sparked a series of lawsuits in different courts.

On June 30, Intesa Sanpaolo Holding International, Privredna Banka Zagreb, Sberbank Europe and Sberbank dd Zagreb refused to initiate legal action in such cases, and Raiffeisenbank International and Raiffeisenbank Austria withdrew their case to the Commercial Court of Zagreb.

The joint statement was signed by the government and OTP Bank, Erste Group Bank, Raiffeisen Bank International and Raiffeisenbank Austria, UniCredit Bank Austria and Zagrebačka Banka, Intesa Sanpaolo Holding International and Privredna banka Zagreb dd, as well as Sberbank Europe and Sberbank dd Zagreb.

The government said it highly appreciates the constructive approach of credit institutions to unresolved issues and their recognition of the positive effects of government policies aimed at bringing Croatian legislation in line with the EU acquis communautaire and the adoption of the euro as legal tender in Croatia.

Credit institutions recognized the government’s commitment to addressing outstanding issues and the government’s efforts to create an enabling business environment.

Two arbitration cases brought against Croatia by Addiko Bank AG and Addiko Bank dd and Société Générale SA, as well as a case brought by Addiko Bank dd in the Commercial Court of Zagreb, are ongoing. The statement says that in cooperation with the state prosecutor’s office, the government will continue to take all necessary steps to protect the interests of the state.

Speaking at a press conference in February, Finance Minister Zdravko Maric said that thanks to the agreement reached with the banks, a potential disbursement from the state budget of at least 2.5 billion Croatian Crowns has been averted, adding that 482 million Croatian Crowns are related to claims before the Commercial court of Zagreb and about 2 billion Croatian kronor for claims in ICSID in Washington.

Maric said Croatia paid Croatian kronor 127 million for court fees, attorney fees and expert witnesses, and similar expenses in cases pending at ICSID.

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