Czech Radio: ČEZ files lawsuits in Luxembourg over freeze on companies linked to Diag Human

The partly state-owned energy company ČEZ has filed lawsuits with the relevant Luxembourg courts over the freeze on local companies through which it owns a majority stake in gas distribution company GasNet. ČEZ spokesperson Ladislav Kříž confirmed the information to Czech Radio. ČEZ reported the freeze on Monday; Luxembourg’s courts approved it at the request of Diag Human, a company owned by businessman Josef Šťáva. The Czech-Swiss businessman is seeking about 17 billion crowns in compensation from the state in the Diag Human case. ČEZ called the move by the Luxembourg authorities illegal and vexatious, saying it had nothing to do with the case.

ČEZ said on Monday that it had received notification from a Luxembourg bailiff of two decisions concerning Czech Gas Networks S.à r.l. (CGN), in which ČEZ holds a stake of about 55 percent, and Czech Gas Networks Investments S.à r.l. (CGNI), which is wholly owned by CGN. CGNI owns Czech company Czech Grid Holding, which in turn owns GasNet and GasNet Služby. The state is ČEZ’s majority owner, with a stake of about 70 percent.

"According to the notification, 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.

In response, it said that Diag Human SE does not and has never had any legal claim or other legal basis for a claim against ČEZ or any other company in the ČEZ Group, on the basis of which it could seek any performance from these companies or take legal action against them. "Any claims it may assert, if they exist, can be directed exclusively against the Czech Republic, not ČEZ, which is not mentioned at all in the arbitral award, was not a party to the arbitration proceedings and had nothing to do with them," it added.

ČEZ said on Monday that, based on legal analyses, it expected the decision to freeze the companies to be overturned within a matter of months.

Diag Human’s lawyer Jan Kalvoda rejected the claim that their request to enforce against Czech assets in Luxembourg was vexatious. "This is not harassment, much less action aimed at ČEZ, but the long-delayed exercise of a creditor’s rights against a debtor. The heart of the problem is the conduct of the debtor, the Czech Republic, which refuses to meet its obligations as ordered by final judgments of an independent court," Jan Kalvoda’s law firm told the Czech News Agency (ČTK) on Tuesday.

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 the company raised doubts about Conneco’s reliability. Šťáva has been litigating against the Czech Republic ever since. A ruling by a London court last year upheld Šťáva’s claim.