Prime Minister and Finance Minister in disagreement over Nomura arbitration case

Czech Prime Minister Jiri Paroubek and Finance Minister Bohumil Sobotka are in disagreement over how to proceed with a controversial arbitration case that could cost the state 40 billion crowns (over 1.5 billion US dollars). A London court is currently handling a complaint against the Czech Republic filed by the Japanese investment bank, Nomura. Nomura claims that the Czech government failed to protect its investment when it ordered the enforced administration of the ailing IPB bank, in which Nomura had shares, and its subsequent sale to a rival Czech banking institution, CSOB five years ago. Nomura is demanding 40 billion Czech crowns in compensation.

From information received by the Czech intelligence services, Prime Minister Paroubek fears the state could lose the case and would like it to try to come to an agreement with Nomura. Mr Sobotka believes that any such agreement would violate state guarantees promised to CSOB in 2000.