Croatia fulfilled all its commitments from Mokrice MoU, Slovenia did not

Ministry of Foreign and European Affairs of Croatia considers as unfounded all the allegations from the recent press release of the Slovenian Governmental Office...

Ministry of Foreign and European Affairs of Croatia considers as unfounded all the allegations from the recent press release of the Slovenian Governmental Office, in particular that the continuation of judicial proceedings against Ljubljanska banka (LJB) in Croatian courts presents a violation of the Memorandum of Understanding between Croatia and Slovenia signed in Mokrice in 2013 (MoU).

Croatia fulfilled all its commitments stemming from the Mokrice Memorandum in their entirety, and it is in fact Slovenia that is in violation of the Mokrice Memorandum. Namely, Croatia ensured that, inter alia, Croatian banks propose a stay of judicial proceedings pending in Croatian courts. Slovenia, on the other hand, committed in the MoU to ensure that the Slovenian Ljubljanska banka agrees to this stay, but it has failed to do so, which directly resulted in these proceedings continuing.

As a matter of background, MoU does not require „the cessation of all court proceedings“, as the press release alleges. Instead, the MoU mandates its signatories – Croatia and Slovenia – to ensure that conditions are met for the parties to individual proceedings in Croatian courts, i.e. the Croatian banks ZaBa and PBZ and the Slovenian bank LJB, to agree in each individual case to “the stay” (Point 3). In that sense, in addition to the commitment of Croatia, the MoU explicitly provides that “the Government of […] Slovenia will ensure that LJB as the defendant in these proceedings agree[s] to stay as well”. Pursuant to the Croatian legislation known to Slovenia at the time when the MoU was negotiated and signed, courts can grant a stay only if all the parties to the proceedings agree to that. This is why the latter provision imposing an obligation on Slovenia was inserted in the MoU in the first place. If the Slovenian interpretation was correct, that proceedings need to be ceased or halted by some kind of a unilateral act, the agreement of the defendant and a provision to that effect in the MoU would have been obsolete. Slovenia did not meet its commitments to ensure the said agreement of LJB to a stay, hence the courts could not rule of the stay and proceedings continued.

Finally, the legal nature of the MoU is of no relevance in this discussion. What counts is the understanding reached between the signatories of the MoU and the commitments that they willingly assumed thereunder.

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