Czech Republic Awarded 5.2 Billion Crowns In Dispute With Pawlowski AG

The Czech Republic succeeded in an international arbitration with the Swiss company Pawlowski AG for approximately 5.2 billion crowns, the Ministry of Finance informed ČTK. The Reporter magazine drew attention to the shift in arbitration. The dispute concerned an allegedly failed development project in Benice, Prague.

Entrepreneur Sebastian Pawlowski bought land between Prague’s Benice and Uhříněves between 2007 and 2008. After the change of the zoning plan, they became building plots and the entrepreneur planned to build a satellite town on them through the company Projekt Sever. However, the change of the zoning plan was subsequently canceled by the Czech courts due to defects.

According to the Ministry of Finance, the arbitral tribunal unanimously dismissed all the main points of the lawsuit. According to the tribunal, Pawlowski AG could not legitimately expect its land to be converted into a building site, as this change is subject to a decision by the municipalities and can be challenged in the courts, the ministry said. The change in the zoning plan was challenged by the city district of Prague-Benice and the court annulled it for non-compliance with the requirements of the law, the office added.

So far, 35 arbitrations have been completed, including the result announced todayagainst the Czech Republic. The Czech Republic is currently facing five international arbitrations.

Most recently, in April this year, the Czech Republic succeeded in an international arbitration with the Dutch company Fynerdale Holdings by approximately 2.4 billion crowns. The dispute concerned the alleged mistake of the Czech Republic towards the company in connection with the trade in food poppies.