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Arhar told TV Slovenija that Zagreb was pretending ignorant and that irrespective of the claim of the Zagreb Municipal Court that the memorandum by the two countries is not an international contract because it was not ratified in parliament, he did not expect things to take such a turn.

We build on the premise that a word given has some value and that the content of the legal proceedings is provided by the litigating parties, he said.

This means the banks, but they are not the original plaintiffs, since they received a mandate of the Croatian government. Thus the government is in the background, which is why such news is great surprise, Arhar said.

Erjavec meanwhile told TV Slovenija that Croatia will have a hard time explaining to Europe and the world that the memorandum was not an agreement between the two states and did not determine that the issue must be resolved as part of succession to the former Yugoslavia.

"I do not understand why Croatia is resorting to such explanations with respect to the memorandum," Erjavec said.

The response comes after Croatian paper Večernji list reported on Saturday that Zagreb Municipal Court judge Nikola Raguz decided to continue with proceedings in one of the lawsuits by Privredna banka Zagreb (PBZ) against LB over Yugoslav-era savings.

The judge failed to accept the Croatian demand that the proceedings be put on hold as well the Slovenian demand that they be abolished. Both sides can appeal the decision.

In the memorandum signed by the then PMs Janez Janša and Zoran Milanovič at Mokrice on 11 March, the Croatian government committed itself to stopping all proceedings against Slovenian banks until a comprehensive solution is found in the framework of succession to the former joint state.

Slovenia is insisting that the LB dispute needs to be resolved as part of succession and that negotiations cannot be accompanied by decisions in courts.

The Croatian government on the other hand is claiming that it has met its commitments as outlined in the memorandum, which helped pave the way for Slovenia's ratification of Croatia's EU accession. The government instructed banks and the banks their lowers that proceedings related to the LB be stopped, it argues.