Pluska, 04.03.2013 EN

Another partial victory: €131 million arbitration finished for now

4 March 2013, 17:51

Former shareholder of the health insurer Apollo has sued Slovakia for the ban of profit of the health insurance companies. We have partially won the arbitration.

The Ministry of Finance has reason to be happy. The arbitration in which the Austria company Euram Bank, the former shareholder of the health insurer Apollo, sues Slovakia for ban on profit of health insurers for €131 million, is partially won.

The Tribunal decided that it has no jurisdiction to decide in most parts of the claim. “In this decision it has reached a conclusion that it has no jurisdiction for decision in most claims brought by Euram Bank, whereas the initially claimed amount has not yet been specified in the proceedings,” the spokesman of the Ministry of Finance Radko Kuruc confirmed.

Company Euram has been claiming damages allegedly incurred after having obtained 51% shares in the Apollo health insurance company through its Slovak subsidiary E.I.C. in 2007.

Ban of profit

“Despite the fact that this company sold its share in Apollo already in 2008, Euram has been claiming damages that allegedly were incurred by the profit ban adopted in the end of 2007,” the Ministry claimed more than two years ago.

“It is a partial victory, but not one that somebody would not expect. Slovakia has held a strong position in the arbitration from the beginning, because the bilateral treaty with Austria had been concluded unfavorably for the investor,” Jana Martinková, expert on arbitrations, explained.

She says the Tribunal in this case has only confirmed its competence regarding the part of the dispute concerning the free transfer of payments in regard to investments.

Reform of health insurance

“Here, the Tribunal should also deal with the question of eventual speculative investment, as E.I.C. acquired the stock in the time when at least the intention of the government to reform the healthcare system has already been known,” Martinková thinks.

She thinks if Slovakia should have to pay, then only a fraction of the claimed amount. Slovakia is facing another arbitration that was brought by Achmea in February. Minister of Healthcare Zuzana Zvolenská should shortly submit to the government a proposal regarding the transformational statute that should govern the way of expropriating the private health insurers.

A single, state-owned health insurer should be established. “According to the wording of the transformational act, we shall see whether also experts on EU law and bilateral investment treaties have been called to join the expert talks, which will have decisive influence on the outcome of the arbitration,” Martinková thinks about this.