Croatian Prosecution of Oil CEO Suffers New Blow

(CN) – A magistrate chided Croatia on Wednesday for trying to make Europe’s top court weigh in on Hungary’s refusal to execute an arrest warrant.

Though identifying information is redacted from the opinion this morning out of the European Court of Justice, the details of the case align with Croatia’s attempt to prosecute Zsolt Hernadi, chairman of the Hungarian oil group MOL.

Hernadi is charged in Croatia with bribing former Croatian Prime Minister Ivo Sanader in 2009 so that his company would get a controlling stake in the Croatian oil firm INA. Croatia indicted Hernadi on March 31, 2014 — the same date that the European Court of Justice gave Wednesday for the indictment of the Hungarian national identified in its opinion as AY.

As reported in 2013 — when Croatia joined the EU and initiated a European arrest warrant against Hernadi — the Croatian state had a 44.9 percent holding in INA but wanted to claw back management control from MOL.

The Budapest Municipal Court refused Croatia’s request to extradite Hernadi, however, based on its finding that Hernadi did not commit the crime of which he was accused in Croatia.

Advocate General Maciej Szpunar noted Wednesday that Croatia issued a second arrest warrant against AY in winter 2015 and submitted it to Hungarian authorities again in January 2017.

Hungary never executed it. Instead authorities there issued an opinion that said the country faces no obligation to act on the warrant, and that arresting AY based on the 2015 warrant is not legally possible.

The court in Zagreb, Croatia, which was furnished with a copy of this opinion in April last year, subsequently asked the European Court of Justice to weigh in.

Though Szpunar’s opinion Wednesday is not binding on the Luxembourg-based court, it will be taken into consideration as proceedings begin there now on the case.

Szpunar said the court lacks jurisdiction to resolve the dispute because it is not the place of the Zagreb court to determine whether Hungarian authorities fulfilled EU requirements by not executing the warrant.

Any ruling to this end would be “no doubt interesting on paper,” Szpunar wrote, “but not capable of being applied in practice to the concrete case at issue by the Croatian authorities.”

“The decision could only be relevant to the Hungarian authorities — who are not at the origin of this request for a preliminary ruling,” the decision continues.

Szpunar also emphasized mutual trust is paramount when it comes to the system underpinning European arrest warrants.

“Once the issuing member state [in this case, Croatia] begins to apply and interpret the law of the executing member state [Hungary] and attempts to ascertain whether the latter has correctly applied the law, it moves dangerously close to a breach of that mutual trust,” the opinion states.

Stephen Anway, an attorney for Croatia with the firm Patton Boggs, declined to comment on Szpunar’s nonbinding opinion.

MOL was represented in international arbitration by Dechert attorney Arif Ali. He has not returned an email seeking comment.

Szpunar did conclude that Hungary must make some decision, one way or the other, about Croatia’s second warrant — saying it is not enough to rely on its refusal of the first warrant.

“This will enable the referring court to establish whether it should withdraw the second EAW or not,” he wrote.

As to whether the Hungarian chairman has been “finally judged” by Hungarian authorities — the basis authorities there gave for refusing the first warrant — Szpunar emphasized that AY was considered only a witness, not accused, in those proceedings.

“In my view, in order to be ‘finally judged’, an individual must have been at a certain stage in the proceedings an accused,” Szpunar wrote.

Croatia undertook its anti-corruption stance as part of its bid to strengthen the country’s rule of law so that it could join the European Union.

Sanader, who was prime minister of Croatia from 2004 to 2009, was the highest-ranking Croatian official tried for graft as part of that drive.

He was convicted and sentenced to eight and a half years in prison for accepting a bribe by MOL of 10 million euros, about $11.8 million today.

Though Croatia’s Constitutional Court ordered Sanader retried for procedural errors, health issues have kept that retrial on hold.

MOL prevailed against Croatia in international arbitration over the INA deal. After a Swiss court refused to let Croatia annul that outcome – which included a judgment of costs against the Croatian government – MOL asked a federal judge in Washington, D.C., to confirm its award last year.

Hernadi meanwhile filed a lawsuit in September 2017 against Croatia before the European Court of Human Rights.

He claims that Croatia’s arrest warrant against him – which Interpol made public in 2013 and removed in 2016 – breached his freedom of movement.

Citing Hernadi’s acquittal of similar charges in Budapest, Austria and Germany determined that no one can be tried twice for the same case, and suspended Croatia’s warrant against him.

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