Warsaw (Puls Biznesu) – After six months, arbitration officers decided that Eureko, the Dutch insurer and investor in Polish PZU insurance company (31 percent stake), was right to accuse the Polish government for bad treatment of foreign investor. Eureko wanted to increase its stake claiming that it had been given the right in privatisation agreement, the Polish government said it was not like that.
“Now, the second state of the arbitration proceedings starts, in which it will be decided, how much we will pay for the guilt”, an anonymous yet well-known lawyer said. The fine may be huge. In the Czech Republic, taxpayers paid USD 355m (EUR 288.4m) in 2003 in damages for Central European Media Enterprises which in 1990ies bought for USD 27m TV Nova broadcaster. If similar rules were used in Eureko case, the fine could amount to PLN 40 billion (EUR 9.9 billion).
It seems that the only solution is to try to reach settlement with the Dutch company. In December 2004, Eureko ultimately withdrew its settlement offer, when the Polish Parliament failed to ratify the offer in a timely manner. “We have warned of such consequences. Now, the opponents will be able to lead the negotiations themselves when after parliamentary elections they build the government”, Malgorzata Ostrowska, deputy Minister of Economy commented. Parties including rightist LPR, PiS or central PO were against the settlement last year. They changed their minds. “One could have expected that the arbitration would not be favourable to us. Despite the loss, we still may make settlement. The Treasury should agree with Eureko, still keeping control over PZU", Kazimierz Marcinkiewicz, PiS MP said. “Of course it would be good to make settlement but I guess they will be ready to give up damage claims if PZU is listed. Which means that Eureko could have 51 percent of PZU’s shares”, the lawyer said.
(PLN 1 = EUR 0.247)
(USD 1 = EUR 0.812)Poland/Enterprises/Insurers