Parliamentary Commission to Consider How to Shield NLB from Paying Damages to Croatia

By , 09 Apr 2018, 14:56 PM Business
Parliamentary Commission to Consider How to Shield NLB from Paying Damages to Croatia Montage: JL Flanner

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One proposal is based on the claim that NLB is not the legal successor to LB. 

STA, 9 April 2018 - The parliamentary Constitutional Commission will meet on Monday to discuss an expert opinion on how to proceed with shielding the NLB bank from paying damages in Croatia in relation of Yugoslav-era foreign currency deposits at the defunct LB bank.

The task force, which was appointed last month by the Constitutional Commission to advise it, has changed the original constitutional bill filed by two opposition parties.

It believes the bill should set down "an exception to public order or public policy", which will enable NLB, and courts in Slovenia and third countries to reject the implementation of Croatian court rulings.

The constitutional bill should state that court decisions on savers of LB, NLB's predecessor, are in contradiction with Slovenia's public and constitutional order and with Croatia's international obligations.

The five-strong task force also proposes that Slovenia clearly state again its position that NLB is not LB's universal legal successor.

Last month, the opposition Democrats (SDS) and New Slovenia (NSi) filed a bill to amend the 1994 constitutional law following reports that NLB had paid some of the massive damages ordered by Croatian courts.

Commenting on the task force's proposal last week, SDS MP Jože Tanko said the bill was not an ultimatum, but a proposal designed to help solve the issue of Croatian LB savers.

Similarly, opposition New Slovenia (NSi) acting president Matej Tonin said the bill was meant to encourage experts and politics start dealing with the issue.

The Constitutional Commission held its first session on the SDS and NSi-sponsored bill on 26 March, agreeing that action should be taken against Croatia.

The MPs on the commission saw the bill as one of the possibilities leading to the goal of protecting the state's outright stake in NLB.

However, they first appointed the group of five experts to establish whether the bill is in line with Slovenian and international law.

Prior to the commission's session NLB shareholders are meeting to discuss the Yugoslav-era foreign currency deposits in line with a government decision.

The government ordered Slovenian Sovereign Holding (SSH) as the sole shareholder of NLB on 21 March to implement the decision that the rulings of Croatian courts against NLB over Yugoslav-era deposits are unlawful, and to take measures to prevent or at least limit the enforcement of NLB's assets in Croatia.

SSH is thus expected to task the NLB management to "implement adequate measures with the purpose of preventing or limiting the possibility of such enforcement" and report to SSH by 31 May.

The issue of Yugoslav-era foreign currency deposits at LB is a matter of succession to the former Yugoslavia. Croatia agreed to it being treated as part of succession in the 2013 Mokrice agreement, but later redefined it as a dispute between banks, so Croatian courts continue to process lawsuits against NLB over the matter.

According to the latest data available, Croatian courts have so far concluded the proceedings in four cases with NLB winning only in one.

In one case, a claim to NLB was collected with a writ of execution, another one from last November in the amount of EUR 1.5m was paid by the bank, and in one case the bank should pay about half a million euro plus interest.

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