Nomura ready to make peace with Czech state

Adam Junek and Naďa Straková
30. 1. 2008 1:40
Decade long fight over IPB bank now almost over

Luxembourg/Prague - A ten-year old dispute between the Czech state and Japanese investment holding Nomura over a collapsed Czech bank IPB seems to be nearing its resolution, Aktuálně.cz has learned.

The whole dispute is very complex and hard to follow. But here is a brief summary of what happened since the first lawsuit between Nomura and the Czech state appeared.

The bank IPB, one of the first banks that was privatized after the Velvet Revolution and partly owned by Nomura, was placed under forced administration over what the then Social Democrat government argued was grave mismanagement and suspicious transactions.

The Czech state did something that no one quite expected - it sold the failed bank to another Czech bank ČSOB for the symbolic price of one CZK. Later on the government provided ČSOB with money to cover bad loans and debts that IPB happened to have.

Nomura took this step as the grounds to sue the Czech state for failing to protect its investment in IPB. Since then both sides have been suing and counter-suing each other.

Lawsuit over?

Now the lawsuit over the IPB bank appears to be over.

According to the information available to Aktuálně.cz, Nomura, which won the arbitration lawsuit in London in 2006, withdrew the lawsuit against the European Commission (EC) filed with the European Court of First Instance in Luxembourg.

Nomura filed the lawsuit against the EC because the EC decided not to follow the case of allegedly illegal state support to ČSOB when it took over the bankrupt IPB.

The EC alleged the case had taken place before the Czech Republic had accessed to the EU and therefore no EU laws were applicable upon the case. Nomura was of the opposite view.

"I can confirm Nomura pulled back from the lawsuit against the EC shortly before the end of last year," stated Nomura media representative for the Czech Republic Jiří Hrabovský.

"The clause in the arbitration settlement [reached between both sides in November 2006] states that should the Czech Republic give instructions to pull back from the lawsuit, Nomura shall do so. We received this information from the Ministry of Finance," added Hrabovský.

EC not flexible

Nonetheless, the European Court of Justice is rather slow in action. The Nomura case is still listed among the pending "Czech" cases.

Foto: Aktuálně.cz

"It is still registered among the unsolved cases. It may be because we have not received the confirmation from Nomura yet," said the European Court Press Office Andrea Trebulová.

In the forthcoming months the Czech state is going to find out how much the lost case with Nomura at the London's arbitration court is going to cost.

Only then the state will disclose the details of the arbitration settlement, which has been strictly confidential.

Compensation in a few months

"The last week of March will see the last hearing on the financial compensation. The final decision should be made in about 2 months after that. There is still an option we won't have to pay anything," said Radek Šnábl, who is in charge of arbitration cases at the Ministry of Finances, in an interview for Aktuálně.cz.

The financial compensation the Czech government will have to pay to Nomura should not exceed 7 billion CZK.

"The arbitration settlement contains a formula for counting the final compensation, the amount of which is derived from the arbiters´ decision. There is a number of steps that define the compensation for both sides. The price of IPB defined in the arbitration settlement is only an entry figure," disclosed Radek Šnábl. 


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