23. 08. 2017
Bratislava, August 21, 2017 – The Slovak Republic has won the over €239.7 million dispute against the companies EuroGas and Belmont Resources, which has been in the media for a quite some time. The case had been a long-standing dispute over the talc deposit in Gemerská Poloma. In the award, the tribunal accepted the jurisdictional objections raised by the Slovak Republic.
The claimants argued that the Slovak Republic unjustifiably revoked the talc deposit in Gemerská Poloma back in 2005. Apart from administrative and court proceedings, the claimants initiated an international investment arbitration proceeding. In addition, an insolvency proceeding against the company EuroGas (I) in state of Utah, which the Slovak Republic had entered, was resumed.
The tribunal accepted the jurisdictional objections raised by the Slovak Republic. The background of the claimant EuroGas (I) led by Wolfgang Rauball, the CEO, deserves a special attention. It was proven in the course of arbitration that while the former foreign US company EuroGas (I) went bankrupt in 2004, in the meantime, a company with the same name EuroGas (II) was founded in 2005, with these two companies apparently merging after the closure of the bankruptcy proceeding. The tribunal came to the unanimous conclusion that the claimant EuroGas (II) attempted to illegally merge with EuroGas (I). Since this was an illegal merger, no rights, which the claimant EuroGas (II) could have potentially applied in the arbitration, were ever transferred.
In respect of the claimant Belmont Resources, tribunal members recognized, in the portion of 2:1, the time limitation for the possibility to hear any dispute set by the new bilateral investment treaty between the Slovak Republic and Canada from the year 2012. The tribunal acknowledged that the dispute arose back in the year 2005 when the amendment of the Mining Act, concerning the assignment of a mining area to another company, applied for the first time. The amount of alleged damages claimed against the Slovak Republic exceeded €239.7 million, with the tribunal deciding the dispute on procedural grounds.
The Slovak Republic has been negatively presented, both in domestic and foreign media, by the CEO of EuroGas. The Ministry of Finance of the Slovak Republic always perceived these claimants to be speculative, which was confirmed during the arbitration proceedings. Similar conclusions were reached by the tribunal in assessing the merger of EuroGas (I) and (II).
Further information on the dispute can be found at https://icsid.worldbank.org/en/Pages/cases/casedetail.aspx?CaseNo=ARB/14/14.
The success rate of the Slovak Republic in investment arbitrations after the recent award of the tribunal of the International Centre for Settlement of Investment Disputes (ICSID) has again increased. To this date, the Slovak Republic has an exceptionally good score in the outcome of disputes with foreign investors. Thanks to these results, the country is beginning to be perceived as a strong state abroad. In addition, investors and foreign institutions share the same view about the Ministry of Finance of the Slovak Republic.
Ministry of Finance of the Slovak Republic