The Czechoslovak Commercial Bank (CSOB) has lost a long-running lawsuit against the Ostrava-based paper company Icec-Holding and must pay CZK 3.7 billion in damages. ČSOB said in a press release that it is considering whether to take further legal action, leading to a possible review of the decision.
The dispute between the two parties has been ongoing since 1999. At that time, Icec-Holding sued the Investment and Postal Bank (IPB), which went bankrupt and whose activities were taken over by ČSOB a year later, so it inherited the claim.
Icec-Holding claimed that IPB had breached its contractual obligations and was entitled to damages and a contractual penalty. At the heart of the dispute was IPB’s takeover of the Slovenian paper mill Vipap, whose shares Icec-Holding held and which guaranteed its loan to IPB. However, the Ostrava company did not like the bank’s procedure and challenged it in court.
The arbitration panel now sided with the paper company. It ruled that ČSOB must pay Icec-Holding CZK 3.7 billion in damages and CZK 5 million in court costs within 15 days of the decision. “The claimant failed in the remainder of his claim, and the arbitration panel ordered him to pay CSOB costs of CZK 17.4 million,” ČSOB said in a press release.
The bank also hinted that the case may not be over for it yet. “ČSOB is considering possible further legal steps leading to a review of this award,” it added.
The Czech National Bank (ČNB) has also commented on the case and, like ČSOB itself, has assured that the payment of compensation will have no impact on the stability and functioning of the bank. In all relevant indicators, the bank fulfills all requirements under the Banking Act and other regulations governing the activities of banks,” the ČNB said.