Minister of Entrepreneurship and Crafts Darko Horvat said on Wednesday that the arbitration concerning the INA oil company was not necessary and that management in that and other public companies should be replaced and enter a new investment cycle with new management staff.
In November 2013 the Hungarian MOL oil company, which holds 49.08% of shares in its Croatian peer, commenced arbitration proceedings at the International Centre for Settlement of Investment Disputes (ICSID) in Washington against Croatia. MOL accused the Croatian government, which holds a 44.84% stake in INA, of breaching its obligations and undertakings in relation to MOL's investments in Croatia.
After MOL launched the arbitration proceedings, the Croatian government launched arbitration proceedings against MOL before the United Nations Commission on International Trade Law (UNCITRAL) in Geneva in January 2014, asking for the annulment of amendments to a 2009 shareholders' agreement which gave MOL control over INA and a gas business master agreement, and seeking compensation for the damage caused.
Minister Horvat recommends that talks be held with MOL concerning INA's status in Croatia but also on the regional market.
"It is necessary to inspect the basic agreement to see whether the strategic partners have fulfilled their obligations," Horvat underscored, adding he was not satisfied with the investments made in INA.
Asked why then contracts of the Croatian members of INA's management board had been extended by one more year, Horvat said, "I think that the team in INA but also in other public companies needs to change. I believe that it is necessary to refresh the personnel in public companies and enter into a new investment cycle."
When reporters commented that Prime Minister Tihomir Oreskovic and Economy Minister Tomislav Panenic did not agree with this, Horvat said that everyone had the right to their opinion and the prime minister would make the final decision.
Ahead of the government meeting on Wednesday, Panenic had said that he had recommended that contracts for the Croatian members of INA's management board be extended by another year.