BRATISLAVA, October 24, (WEBNOVINY) — Slovakia has won the first dispute with foreign stockholders of local private health insurance companies. According to the Finance Ministry, the respective arbitration tribunal handed down a final ruling in the international dispute between HICEE B.V. versus the Slovak Republic on October 17, 2011 and closed the argument in favor of the Slovak Republic. The Dutch company HICEE B.V., a member of private equity group Penta and shareholder of Dovera and Apollo health insurers, contested alleged violations of the Treaty on Support and Mutual Protection of Investments sealed between the Czech and Slovak Federal Republic and the Kingdom of the Netherlands. The investor saw its rights violated via the law that limited the use of profit generated by health insurance companies. “The demanded amount of damages was calculated at over EUR 1 billion during the proceedings,” the ministry added.
The tribunal issued a partial ruling in late May 2011, stating that it was not authorized to decide on the dispute. The Finance Ministry reported the crucial aspect was the assessment of Slovakia’s argument that the indirect stake of HICEE B.V. in Dovera and Apollo does not qualify for protection ensuing from the above treaty, which protects only investments carried out directly or via a third-state investor. “Regarding the legal decision favoring the Slovak Republic, the arbitration tribunal did not reach the phase when the tribunal would assess the subject matter of the dispute, i.e., whether the legal change in the area of health insurance violated the Treaty and caused damages to HICEE B.V.,” the ministry concluded.
Slovakia was represented by a team of Skadden, Arps, Slate, Meagher & Flom, while additional services were provided by Rowan Legal and Jozef Vozar. Slovakia has paid over EUR 5.5 million for legal services in this dispute plus and an upfront payment of EUR 250,000 that covered the costs of tribunal. Slovakia still faces two international arbitration disputes and three lawsuit filed with local courts by stockholders of health insurers.
In its statement to the ruling, Penta declared that the subject matter of the arbitration was the question whether the ban on profit use had damaged the investments and the amount of the potential damage. “After two years, the arbitration tribunal has not issued any decision on potential damages and has not dealt with their compensation, either,” Penta’s spokesperson Martin Danko remarked. “Since the Constitutional Court of the Slovak Republic already marked the revision of the Law on Health Insurance Companies from 2007 as unconstitutional, we have decided not to apply any appellate instruments in the international arbitration,” Danko announced. He was unwilling to elaborate on local disputes. “A lawsuit over damages to our investment has been filed with the Bratislava I District Court. The dispute is underway and we will not comment on it until the court decides,” he concluded.
SITA
