Slovenia rejects Croatian bank ruling as 'direct infringement'

Slovenia rejected on Tuesday two rulings by a Croatian court against the defunct Slovenian bank Ljubljanska Banka (LB) and its successor Nova Ljubljanska Banka (NLB), the biggest bank in Slovenia. The Zagreb Municipal Court ruled that the defunct LB bank and NLB must compensate two Croatian banks, Zagrebacka banka and Privredna banka Zagreb (PBZ), which sued on behalf of the government of Croatia for LB deposits that had been guaranteed and paid by Croatia through the two banks. The total amount of compensation approaches 27 million euros (36.7 million U.S. dollars). The rulings by the Zagreb Municipal Court are "direct infringement of agreements" that would be unenforceable in Slovenia, Slovenian Foreign Minister Karl Erjavec said in a statement. The rulings are in violation of the March 2013 memorandum of understanding which stipulates procedures regarding deposits held by Croatian citizens in the Zagreb branch of the defunct LB bank be stayed until the issue is resolved as part of Yugoslavia succession talks. The rulings will have "no consequences for Slovenia" as they run against a 1994 intergovernmental agreement on legal assistance that stipulates foreign court decisions which run against Slovenia law "cannot be acknowledged and enforced" in Slovenia, said Erjavec. On the possible effect of the Croatian bank rulings, Erjavec noted that they will "definitely affect relations." In stead of specifying whether Slovenia would attempt to resolve the matter at EU level, the foreign minister expressed hope that "Croatia will reconsider everything and honor what is written in the memorandum." Meanwhile, the Croatian Foreign Ministry said it saw no need to comment on the lawsuits, claiming all that should be said was said at a meeting between Erjavec and his Croatian counterpart Vesna Pusic in Zagreb in November. On that occasion, Pusic said that Croatia had fulfilled its obligations in compliance with the Mokrice Memorandum and that Zagreb was ready for a possible arbitration in connection with this issue. Both Slovenia and Croatia declared independence from former Yugoslavia in 1991. They signed a memorandum in March 2013, under which all legal actions against LB and NLB would stay until a solution is found.