ČR to pay CZK 300m to Volkswagen after lost arbitration

Prague, Sept 12 (CTK) - The Czech Republic will have to pay around Kc300m to German concern Volkswagen because state-owned company Prisko, in charge of settling claims after privatised car maker Skoda Auto, has lost an international arbitration suit with Volkswagen, Czech Television (CT) reported Wednesday.

Volkwagen claimed in the dispute that the Czech Republic deprived it of Kc500m during the privatisation of Skoda Auto. A court in Austria acknowledged damage compensation of Kc287m for the company in the end.

The Finance Ministry said it was disappointed by the outcome of the arbitration suit.

"The course and the outcome of the court dispute is a big disappointment for me," Deputy Finance Minister Zdenek Zajicek told CT.

Prisko and Volkswagen declined to comment on the dispute.

Prisko, which is owned by the state through the Finance Ministry, hired private lawyers for its representation in the dispute and the ministry's top officials did not take part in the arbitration at all.

Finance Ministry spokesman Ondrej Jakob said Prisko is allegedly preparing an appeal and will bear possible consequences for a failure.

"The Finance Ministry is now considering a further transformation of company Prisko, and one of the alternatives is its liquidation," Jakob told CT.

The ruling of an international arbitration dispute must be executed by Czech courts. The state could then pay the money on its own, or a court might block the state's resources by levying a distraint, CT said.