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Slovenia's Karl Erjavec and Croatia's Vesna Pusić failed to make progress on the latest dispute in the independence-era issue that concerns only those savings deposits that Croatia had be transferred into Croatia's public debt.

The new rift arose after a Croatian court decided to resume proceedings in a lawsuit in which LB and its successor NLB are being sued over deposits even though the countries had signed a memorandum back in March under which lawsuits be stayed until a solution is found as part of talks on succession to the former Yugoslavia.

Each country interprets the term "stay" in its own way, which the ministers agreed today was the main sticking point. Slovenia understands the term as suspension of proceedings, while Croatia understands it as staying them for up to two years.

"That would mean that we could have a problem if a final solution was not reached in that time. Our main concern is that if a decision is not taken within two years, this issue would then not be resolved as a matter of succession, but Croatian courts could continue judging the case," Erjavec said.

He said that Croatian courts had acted differently in the case of LB's claims to Croatian companies and that they suspended proceedings until the issue is resolved in succession negotiations.

Erjavec said that Slovenia would not consent to such interpretation and that it expected Croatia to suspend court proceedings until a solution is found in accordance with the memorandum, which stipulates the dispute be resolved within succession talks.

Erjavec also expressed his conviction that the Slovenian parliament would not have ratified Croatia's EU Accession Treaty had the memorandum stated that court proceedings in the matter be stayed for up to two years.

Pusić meanwhile argued that Croatia had met its commitments under the memorandum, while she repeated several times that Croatia was willing to seek a solution also in arbitration.

Under the memorandum, a solution should be sought in succession talks, but the sides also disagree on the response of the Bank for International Settlements, which instead of its mediation offered its premises for meetings.

With such answer Croatia appears to find the possibilities for reaching a solution through succession talks exhausted.

"Slovenia believes this to be a matter of succession regardless of the response of the Basel bank, which we understand under its wing, to offer anything needed to implement Article 7 of appendix C to the Vienna Treaty" on succession, Erjavec said.

While Slovenia understands the March memorandum on the LB issue as a treaty, Pusić insisted that it was not because if it had been, Slovenian MPs would have been bound in their vote on Croatia's Accession Treaty, which she said could not be the subject of a treaty.

Meanwhile, both ministers pledged their willingness to continue to endeavour for a solution. They assessed the relations between their countries as good despite disagreements.

Two new hearings in lawsuits against LB and NLB are scheduled at the Zagreb municipal court for December.