Minister Pusić discusses Ljubljanska Banka with her Slovenian counterpart Erjavec

Croatia and Slovenia have again agreed that they disagree on the interpretation of the wording of a memorandum of understanding on issues relating to foreign currency savings of now-defunct Ljubljanska Banka's Croatian clients, with the Croatian side showing readiness to approach arbitration

(Hina) - Croatia and Slovenia have again agreed that they disagree on the interpretation of the wording of a memorandum of understanding on issues relating to foreign currency savings of now-defunct Ljubljanska Banka's Croatian clients, with the Croatian side showing readiness to approach arbitration on this matter.

The memorandum, signed in March by Croatian Prime Minister Zoran Milanović and the then Slovenian PM Janez Janša, defines four matters: that the issue of foreign currency savings in Ljubljanska Banka should be handled as part of a treaty on succession to the former Yugoslavia, that a stay of proceedings before Croatian courts regarding this issues should be ensured, that there should be no new lawsuits, and the ratification of Croatia's EU accession treaty by Slovenia.

Our main differences are on the second point, the interpretation of the institute of stay of the court proceedings and the role of both sides in this institute, Minister Pusić said after the two-hour talks with Erjavec.

We are open to arbitration on this issue, she added, explaining that in such a scenario the parties in the case undertake to honour a ruling of the arbitration judge, while in the case of succession, all successors decide by consensus.

Slovenia insists that staying the proceedings means terminating them and handling the matter as part of succession, while Croatia interprets it as a suspension of a maximum two years.

Pusić recently said that in the negotiations before the memorandum was signed Slovenia was acquainted with all the legal provisions pertaining to this issue, while Erjavec said today that during his participation in the negotiations there had been no mention of freezing the court proceedings for two years.

If the matter is not solved in those two years, Slovenia fears that Croatian courts could resume the proceedings, he said, adding that if this had been mentioned, it would have been good to have put it in the memorandum.

In accordance with the memorandum, Croatia and Slovenia sent a joint letter to the Bank for International Settlements in Basel, which said it was not willing to provide a mediator but that it was willing to provide the premises and the technical requirements, said Pusić.

Regardless of BIS' unwillingness to mediate, Erjavec insists this is a succession issue. The 2001 Vienna treaty on succession, which Croatia ratified in 2004, still applies, he said, adding that BIS was not a party to the 2001 agreement but was conceived only as a forum within which the negotiations on the matter would take place.

Slovenia sees the memorandum as a treaty and Croatia as an international act.

Slovenia believes the Ljubljanska Banka issue should be handled as part of succession to the former Yugoslavia as long as necessary, Erjavec said.

Pusić said the memorandum was not ratified in parliaments, only by the governments. "That's an international act. It's impossible to ratify it as a treaty because Slovenian MPs would then have committed to voting in a certain way on the ratification of Croatia's (EU) accession treaty."

Erjavec said that if a provision on a maximum two-year stay had been in the memorandum, he doubted that Slovenian MPs would have ratified it and the accession treaty. The Slovenian side will not give its consent to its lawyers for the stay as Croatia sees it, he added. "We expect a suspension until a final solution is reached as part of the succession."

Croatian Prime Minister Zoran Milanović recently said the legal battle was taking place in Strasbourg and not in Croatian courts, but Erjavec said this reflected "unfamiliarity with the subject. Strasbourg is handling the savings that were not transferred, and this is about transferred savings."

He said the two governments disagreed. "The Croatian government believes Slovenia must act in the same way as Croatia which guaranteed for Ljubljanska Banka clients. We believe the territorial principle applies here. Slovenia guaranteed for all foreign deposits in all banks, regardless of whether they were Slovenian, Croatian, Serbian or other, and there was no other principle."

The two ministers said the talks were constructive and that they should continue.

Under the memorandum, Croatia committed to putting on hold all legal proceedings which two of its banks, Zagrebačka and Privredna, instigated against Ljubljanska Banka Croatian clients' transferred foreign currency savings.

Press releases