Extremely high reward for legal services in Gabčíkovo dispute reduced

In the much disputed case concerning the reward to be paid by the state to the law firm for its services in the dispute over the Gabčíkovo Hydro-power Plant, the final sum will be reduced to only 2.5 percent.

Water dam in Gabčíkovo.Water dam in Gabčíkovo.(Source: Sme)

The state joint-stock company MH Manažment's head Branislav Bačík has agreed with Radomír Bžán's law firm to reduce the amount the state should pay to the company for its legal services in the dispute over the Gabčíkovo Hydro-power Power Plant (VEG) from the original 11 percent to 2.5 percent.

In the legal dispute over Gabčíkovo, Slovakia seemed to be forced to pay €700 million, but Bžán won the lawsuit against Enel, the Italian co-owner of electric-power utility Slovenské Elektrárne (SE) and, according to the terms of the contract, was to be paid a fee of €64 million.

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“We held negotiations on Monday [October 9] based on a request from the law firm which wanted to prevent society from being traumatised by the issue sinking to the tabloid level, as well as a media hunt against the person of the lawyer and his family,” Bačík said on October 10, as quoted by the TASR newswire. “With regard to the fact that the international arbitration has not yet decided on the amount of legal charges, we've agreed to set the maximum sum of remuneration for the lawyer. The sum will then be reduced by the amount that has already been paid to the lawyer, as well as accepted legal charges. The cap ... has been set at 2.5 percent,”

He added that this sum is the result of a mutual agreement, and noted that 2.5 percent of €705.6 million is €17.64 million. The amount that has already been paid to the lawyer (€4.9 million) will be deducted from this, along with legal charges amounting to 12.7 million.

State will not pay whole costs

“This means that if we are 100-percent successful with the legal charges, all the remaining costs of paying the lawyer will have practically been covered by SE,” said Bačík, as quoted by TASR. “I've notified the Economy Ministry's leadership about this agreement, and the ministry has acknowledged it.”

MH Manažment views the agreement as advantageous not only for itself but also for the whole of Slovakia, he added.

As MH Manažment won a €705.6-million case for Slovakia, despite the fact that the other side was represented by a global law firm employing thousands of lawyers, Bačík views the agreed sum as reasonable.

Ministerial reaction

Economy Minister Peter Žiga acknowledged the more than four-fold reduction in royalties for Bžán's law firm. However, the minister expected an agreement on remuneration amounting to 1-2 percent, as reported by TASR.

The ministry is now waiting for the Slovak Bar Association's position on the payment, as well as the results of a ministerial inspection. It will then decide on further steps, according to its spokesperson Maroš Stano.

About two weeks ago, the opposition Ordinary People and Independent Personalities (OĽaNO) party began collecting signatures to convene an extraordinary parliamentary meeting to hold a no-confidence vote in Žiga, as they believe that it is he who should bear the primary responsibility in this case. This is mere election campaigning by OľaNO, the ministry reacted.

MPs from the strongest opposition party Freedom and Solidarity SaS) had not signed the petition to recall minister Žiga by October 6, the SITA newswire wrote. Its chairman Richard Sulík said they were negotiating another possibility: instead of the extraordinary parliamentary session to recall the minister, another extraordinary parliamentary meeting to deal exclusively with this case itself should be convened.

Reward may still be too high

Even after the reduction, the reward for Bžán and his firm is too high for Slovak consumption, the Sme daily wrote, adding that his law company had an annual turnover of around one million euros until 2015 and that this changed only after it received a contract with the National Property Fund (predecessor of MH Manažment). Then, its revenues doubled. To compare: 17.6 million is almost double the annual revenue of the Allen & Overy law firm, the biggest on the market according to economic results.

And the public has little chance to assess whether the reward is too high or adequate, as the information is too sparse, according to Sme. Žiga refuses to publish the verdict which might help to assess Bžán's role and contribution to the whole legal dispute.

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Theme: Corruption & scandals

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