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European Court of Justice to review Slovakia's profit ban dispute with Achmea

Germany'sFederal Court of Justice has complied with a request by Slovakia to have itsprofit distribution ban dispute with Achmea BV be submitted to the European Court of Justicefor review.

Alaw banning public health insurance providers from paying dividends toshareholders was introduced in Slovakia in 2007, but was abolished by theSlovak Constitutional Court in 2011. Achmea, which controls Slovakia's smallestpublic health insurance provider Union, launched proceedings against Slovakiain 2008. In 2012, the country lost international arbitration proceedings andwas ordered to pay the company €22 million in compensation for lost profits aswell as €3 million in legal fees.

Slovakia,which contested the arbitration court decision, wants the ECJ to decide whetheran international treaty on the protection of investments concluded betweenSlovakia and the Netherlands, under which the arbitration proceedings tookplace, is in line with EU legislation. The country argues that the bilateralagreement is no longer applicable following Slovakia's accession to the EU, andthat therefore the arbitration court had no jurisdiction over the dispute.After the ECJ's review, the German court will issue a definite ruling on thecase, the Slovak finance ministry said.

Dutchcompany HICEE B.V., which is a shareholder of public health insurance providerDovera, and Austria's Euram Bank AG, a shareholder of already non-existentpublic health insurer Apollo, also launched arbitration proceedings against the2007 profit distribution ban, but lost their disputes against the country, theMinistry noted.

Thereare three public health insurance companies operating in Slovakia, namelyUnion, Dovera and state-owned Všeobecná zdravotná poistovna, the largest publichealth insurance provider in the country.