Hungary's Capital Court has rejected Croatia’s request to extradite Zsolt Hernadi, the chairman and CEO of the MOL energy company on August 23. Hernadi is charged in Croatia with bribing former Prime Minister Ivo Sanader in 2009 in order to have MOL gain a controlling stake in the local oil firm INA.

"There is a risk that the right to a fair trial would be compromised if the defendant were transferred and the impartial judgment of the case could not be assured," a short statement from the court said explaining the decision. Another reason for rejecting Croatia's request is that the Capital Court has already terminated a procedure against Hernadi in May 2014 in a procedure involving bribery, it argued.

A month ago the European Court of Justice (ECJ) ruled that judicial authorities of the member states are required to adopt a decision on any European arrest warrant communicated to them.

The ECJ's ruling put another twist in the long-running dispute between Hungary and the Croatian government over the running of INA, in which MOL exercises management rights. It holds a 49.1% stake, while Croatia owns a 44.85% stake. 

Croatian authorities have asked Hungary since 2011 to allow Hernadi to be summoned for questioning in relation to the 2009 deal between MOL and INA, but Hungary refused to carry out these requests.

Following the country's accession to the EU in 2013, the Croatian authorities issued a European arrest warrant for Hernadi. However, the Hungarian judicial authorities refused to execute the warrant on the grounds that a criminal proceeding had already been closed in Hungary. 

A month ago the ECJ stressed that the execution of a European arrest warrant cannot be refused on the ground that a decision of the Public Prosecutor’s Office has closed a criminal investigation when, during that investigation, the requested person was interviewed as a witness only. In the present case, as no criminal proceedings were brought against Hernadi he “cannot be considered to have been finally judged”.

The Croatian anti-corruption office accuses MOL's chief of giving Ivo Sanader €10mn in bribes so that Hungarian oil group could have the management rights. MOL has rejected the accusations made in the Sanader trial on several occasions, stating that it never engaged in the bribery of foreign politicians, and never paid money to gain ownership.

Hungary resorts to legal trick

The Hungarian court on Thursday has referred to a May 2014 ruling, which according to some experts, may have been a staged civil lawsuit. The former legal counsel of the energy company filed a suit in 2013 seeking compensation for losses on her MOL shares, arguing that the price has declined considerably after reports of the alleged corruption scandal involving Hernadi.

The outcome of the ruling was never in doubt, Hungary's Capital Court acquitted MOL's first man on charges of international bribery.  The husband of the disgruntled MOL shareholder that brought the civil case to court five years ago is today head of a leading venture capital firm, in which the oil company has recently invested €100mn, with state-owned development bank MFB Invest and state export-import bank EXIM.