MGYOY Mol Magyar Olay Es Gazipari Rt (PK)

By Margit Feher

BUDAPEST--Hungarian energy company MOL Nyrt. (MGYOY) said an international arbitration court has cleared it of bribery in gaining management control of Croatia's INA-Industrija nafte d.d., the latest development in a long-running dispute between the oil and gas producer and the government in Zagreb over the Croatian firm.

MOL, which owns a 49% stake in INA, holds management rights in the oil and gas producer which have been challenged by the Croatian government, itself owner of a 44.8% stake.

The Croatian government said it would oppose the decision by the Permanent Court of Arbitration in The Hague while examining how it might take full control of Zagreb-listed INA.

The government "is strongly opposed to the decision of the arbitration court and will consider all available legal options to contest the decision," Croatian Prime Minister Andrej Plenkovic said in a statement. A decision by the International Court for the Settlement of Investment Disputes in Washington D.C. regarding the dispute is expected next year, Mr. Plenkovic said.

The Croatian government has "made the strategic political decision" to "initiate the process of buying MOL's entire stake in INA under a financially viable plan" and "informed of the decision the Hungarian side at the highest level," Mr. Plenkovic said.

MOL, 27.4%-owned by the Hungarian state, said it remains open to talks. MOL is Hungary's biggest company by revenue with 2015 sales of $14.7 billion.

"With regard to the recent statement of prime minister Plenkovic on Croatia's intention to buy back the whole of MOL's stake in INA, we await Croatia's official notice about this. MOL has always been, and remains open for any discussion about the future of INA," MOL said in an emailed statement to The Wall Street Journal.

Hungarian government spokesman Zoltan Kovacs said that he had nothing to add to MOL's statements.

In a regulatory filing which quoted the court's findings, the Hungarian company said that the arbitration court "finds, declares, rules, orders and awards that Croatia's claims based on bribery, corporate governance and MOL's alleged breaches of the 2003 shareholders agreement are all dismissed." Croatia launched the arbitration case against MOL in January 2014, claiming that MOL had bribed Ivo Sanader, a former Croatian prime minister, to gain management control in INA.

"Having considered most carefully all of Croatia's evidence and submissions on the bribery issue, which has been presented in a most painstaking and comprehensive way, the tribunal has come to the confident conclusion that Croatia has failed to establish that MOL did in fact bribe [Mr.] Sanader," MOL quoted the court as saying.

The court said it can only make rulings public if agreed upon by the parties involved. Some rulings are available on its website, though this ruling is not.

MOL initially bought a 25% stake in INA from the Croatian government in 2003 and increased it later.

MOL would likely ask "at least" $2 billion for its INA stake, based on INA's current share price, Erste Bank said.

"It's hard to see how the Croatian government would be able to pay out such a sum," Erste said in a note to clients. MOL has spent a total of about $1.3 billion on its INA stake, Erste said.

Write to Margit Feher at margit.feher@wsj.com

(END) Dow Jones Newswires

December 27, 2016 09:01 ET (14:01 GMT)

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