Luxembourg court freezes ČEZ stakes over Czech Diag Human case

A Luxembourg court has blocked stakes held by Czech semi-state energy company ČEZ in local companies over the Diag Human case. ČEZ owns gas distributor GasNet through these companies. ČEZ announced the move today on its website. The news was reported by Ekonomický deník. ČEZ described the move by Luxembourg authorities as unlawful and vexatious, saying it had nothing to do with the case. It will file lawsuits challenging the decisions. Czech-Swiss businessman Josef Šťáva is seeking about 17 billion crowns in compensation from the state in the Diag Human case. We are seeking comment from representatives of the Czech government.

ČEZ said it had received notice from a Luxembourg court enforcement officer of two decisions concerning Czech Gas Networks S.à r.l. (CGN), in which ČEZ holds a roughly 55% stake, and Czech Gas Networks Investments S.à r.l. (CGNI), which is wholly owned by CGN. CGNI owns Czech company Czech Grid Holding, which owns GasNet and GasNet Služby. The state holds a roughly 70% majority stake in ČEZ.

According to ČEZ, the decisions follow steps taken by Diag Human in Luxembourg in connection with the compensation it is seeking from the Czech state. “According to the notice, these decisions restrict CGN and CGNI from disposing of assets belonging to the Czech Republic and ČEZ that are held by these companies,” ČEZ said.

“ČEZ considers both decisions unlawful and an abusive exercise of rights against the company. Diag Human SE has no legal claim or other legal basis, nor has it ever had one, against ČEZ or any other company in the ČEZ Group that would entitle it to seek any performance from these companies or take legal action against them,” the company said.

“Any claims it alleges, if they exist, can be directed exclusively against the Czech Republic, and not against ČEZ, which is not mentioned at all in the arbitration award, was not a party to the arbitration proceedings and had nothing to do with them,” it added.

ČEZ will challenge the decisions by the Luxembourg authorities through legal action. “ČEZ is convinced that the decisions are unlawful and expects them to be overturned through the courts, with lawsuits to be filed in the coming days. Based on legal analyses, ČEZ currently expects them to be overturned within a matter of months,” the company said.

The Diag Human case began in 1991, when the Ministry of Health launched a tender for the processing of blood plasma. It reached a preliminary agreement with Novo Nordisk and Conneco, which later became Diag Human. In 1992, then-minister Martin Bojar informed Novo Nordisk that it had not won the tender, and a letter from the Ministry of Health to Novo Nordisk raised doubts about Conneco’s reliability. Šťáva has been litigating against the Czech Republic ever since. A London court ruling last year upheld Šťáva’s claim. In January this year, HlídacíPes.org reported that Diag Human had begun legal proceedings to recover the compensation and had targeted two companies in which ČEZ holds stakes. ČEZ told the Czech News Agency at the time that this had not affected GasNet’s operations.