The Slovenia Times

Erjavec to Meet Pusić on 20 November over LB Issue



Speaking to reporters in Ljubljana on Monday, Erjavec said that at the meeting in Zagreb, he and Pusić would also discuss how the two countries understood the March 2013 memorandum on Ljubljanska banka (LB) savings deposits, which paved the way for Slovenia's ratification of Croatia's EU Accession Treaty.

"To Slovenia it is perfectly clear that this is an international treaty, considering that the document was signed by both prime ministers," Erjavec said.

The memorandum states clearly that court proceedings against LB and its successor NLB are stayed until a final solution is reached in the framework of succession to the former Yugoslavia. "But as we can see, [proceedings] aren't stayed," Erjavec said.

He underlined that even if proceedings continued before Croatian courts and if final rulings were reached, these would not be executable.

"The memorandum sets forth in very clear terms whose the jurisdiction over this issue is and this jurisdiction is in the framework of the 2001 Vienna agreement [on succession to the former Yugoslavia]. We shall insist on it."

A similar view was voiced by Slovenian Prime Minister Alenka Bratušek, who said that the memorandum was binding for both countries and that cases related to the matter cannot be resolved in front of Croatia's courts.

The comments come after Croatian daily Večernji list reported on Saturday on a decision by a judge at the Croatian Municipal Court to resume proceedings in a lawsuit by Croatian commercial bank Privredna banka Zagreb (PBZ) against the defunct LB bank and its successor NLB, Slovenia's largest bank.

Judge Nikola Raguz argued that the court does not consider the memorandum to be an international treaty that would take precedence over Croatian national law because the agreement has not been ratified in the Croatian parliament or published in the country's official journal.

The Croatian Foreign Ministry said today that the court's decision in the case would not affect the continuation of talks between the two countries, but that Slovenia too must ensure conditions so that procedures can remain stayed.

According to the court document obtained by the STA, judge Raguz based his argument on the absence of an official document whereby the Croatian government would request stay of the proceedings as it committed in the memorandum signed in Mokrice on 11 March.

In his 24 October decision to resume proceedings, the judge failed to accept Croatia's demand to put the procedure on hold, or Slovenia's demand to interrupt it as presented by the councillors acting for PBZ on the one side and LB and NLB on the other.

"Croatian legislation sets forth that consent by all parties in dispute, including the defendant, is needed for a case to be put on hold. The Croatian side secured conditions for stay on its part. We expect the Slovenian side to do the same," Croatian Foreign Ministry spokesperson Danijela Barišić said.

She added that in the memorandum Croatia committed to ensure all proceedings initiated by the two Croatian commercial banks with Croatian courts to remain stayed, while Slovenia pledged to ensure the consent of LB as the defendant in these procedures.

The two sides in the dispute have 15 days to complain against the 24 October decision in which judge Raguz calls two basic points into question; firstly, whether the memorandum is in fact an international treaty as claimed by Slovenia or an international document as understood by Croatia; and secondly the translation of the term "stay", which appears in the English original of the memorandum.

Aside from the fact that the memorandum was neither ratified by the Croatian parliament nor published in the official journal (both of which was done in Slovenia), the judge argues that documents signed for implementation of existing treaties without assumption of new obligations are not considered international treaties under Croatian law.

He argues that the Croatian government cannot influence court's decisions in implementing laws and that no official publication has been made as to how the Croatian government proposed to ensure stay of procedures except for the plaintiff proposing for the case to be put on hold based on the government's call.

Raguz moreover ascertained that there is no basis under the Croatian litigations act to halt the proceedings as proposed by the Slovenian side, and that the court considered as relevant the translation of the English term "stay" as obtained by the Croatian government, which translated it as a standstill.

Even if the Croatian court interpreter translated it as a halt of proceedings, as translated by the Slovenian side, not a single legal provision for halting the proceedings has been fulfilled, the judge concluded.

Former Slovenian President and international law expert Danilo Türk said he was not surprised by the ruling. He told public broadcaster TV Slovenija that the memorandum was imperfect and poorly written.

He underlined however that the memorandum was an international treaty binding for the signatories. "Slovenia will simply not recognise these proceedings and if this results in a dispute ut will be resolved under the principles of international law and we will be back to square one."

The Croatian Foreign Ministry underscored that the court's decision would not affect talks between the foreign ministers or financial experts on the issue in any way, but would not say when the two foreign ministers would meet.


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