Diag Human Arbitration - Bill Increases as State Delays

As pressure continues to grow on the Czech Government over the landmark ruling against it by an arbitration panel in 2008, the amount that the state will eventually have to pay increases by the day.

As reported by Prague Daily Monitor, the Czech government was ordered by an arbitration panel in 2008 to pay over CZK 8 billion to Diag Human, a blood plasma trading company headed by Swiss-Czech businessman Josef Stava (Josef Šťáva). However, since the ruling was handed down, the state has tried everything in its power to delay payment, including repeated attempts to have the case thrown out.

The arbitration panel was highly critical of state delay in payment stating that the value of the arbitration award has risen 66 times from the amount that would have been owed had the case been solved in the beginning.

Taking interest payments into account, the amount owed to Diag Human by the Czech state is currently estimated at around CZK 10 billion (around EUR 411 million). "Each day that goes by costs the state around CZK 1.2 million" said Czech journalist and political science lecturer Jan Urban, author of the 2007 book Tunel plný krve - aneb kauza Diag Human (loosely translated as Tunnel Full of Blood - The Case of Diag Human).

Vladimir Spidla, Social Democratic Prime Minister 2002, when interviewed by Jan Urban, explained his reticence to pay CZK 2 billion in 2001 as follows: "I thought it would be immoral for one man to have so much money." The great irony is that now, ten years later, Josef Stava is owed five times as much.

This is not the first time that the Czech government has lost such a significant arbitration case. The state recently lost a second round of arbitration proceedings against US businessman Ronald Lauder's company CME. The company had reportedly financed the launch of Czech commercial television channel Nova. Following the arbitration panel's decision, the Czech state was ordered to pay around CZK 10 billion.

The complex background to the Diag Human arbitration case has remained largely unreported in English-language news sources since it first began in 1995. What started as a seemingly simple commercial dispute between Swiss-Czech businessman Josef Stava and the post-communist Czech Republic over suspected unlawful health ministry intervention into his blood plasma business quickly turned into a politicized nightmare that could, sixteen years later, potentially cause the collapse of the Czech coalition government.

Over the course of the arbitration case the Czech state was repeatedly caught using both its internal and external intelligence services against its claimant in clear violation of its own constitution. Between 1995 and today the value of the case rose almost seventy times for one simple reason. No politician of this EU member state would ever dare to recognize and accept the legal validity of four consecutive arbitration awards confirming that the Czech state violated its own laws, intentionally ruined a private citizen's business, conspired with his competitors and inflicted damage that needs to be compensated.


SOURCE: All Voices