31 Jul 2020

It’s the Final Countdown in Slovenia – Agrokor and AVK

On July 29, 2020, the Slovenian Supreme Court (“Court“) reached a decision by which it ordered that the Slovenian Competition Protection Agency (“AVK“) shall restore the Croatian Agrokor d.d.’s shares in the Slovenian retailer Mercator

In its press release, the AVK stated that the decision by which it ordered the withdrawal of shares held by Agrokor was rendered in accordance with Article 201 of the Slovenian Misdemeanor Act (Zakon o prekrških) in 2019.  Article 201 enshrines that anyone’s property may be confiscated in cases there is likelihood of the perpetrator hiding or fleeing the country during the procedure before the court or until the judgement has been reached. Therefore, being led by and relying on this Article, the AVK temporarily seized Agrokor’s shares in Mercator, making it impossible for Agrokor to transfer a majority stake in Mercator to its successor Fortenova group.  The seizure of shares was based on a non-final AVK’s decision to slap Agrokor with a EUR 53,9 million fine because Swiss-based Agrokor AG did not notify the acquisition of Slovenian-based company Costella d.o.o. in 2016.  The entire transaction was led by the then President of the Management Board of Agrokor, Ivica Todorić.  The AVK’s decision might have been just a little bit too much in the eyes of the District Court.

But before we explain the “just a little bit too much” part, let’s look back at what happened just before that.  The District Court of Ljubljana (Okrajno sodišče v Ljubljani) did, and at the same time did not, accept Agrokor’s arguments.  Here comes the “just a little bit too much” explanation, or to be specific, the District Court has amended the AVK’s decision relating to the amount of the fine and reduced the fine from EUR 53,9 million to “just” EUR 1 million explaining that the non-filing was a result of the abovementioned President Ivica Todorić’s negligence.  However, not recognizing all arguments set out by Agrokor, they were left with no other choice than to take this to the next level. 

Hence, the Slovenian State Attorney’s Office (“Office”) filed a request for the protection of legality within the Slovenian Supreme Court whereby the Office stated that AVK acted unlawfully while seizing Agrokor’s shares in Mercator.  According to the Office, AVK had no legal grounds to confiscate the shares and Article 201, the one we mentioned before, cannot be applied to legal persons – that the concept of a legal person hiding from the authorities in a way described in the Article 201, is not conceivable.  The Supreme Court shared Agrokor’s view on the case, affirmed the appeal and vacated the AVK’s decision thus allowing Agrokor to freely access and transfer its shares.

All’s well that ends well, right?

Author: Nadja Kosić