Eureko seeks 10 billion euro damages from Poland over PZU

Dutch financial group Eureko is seeking 36 billion zlotys (10 billion euros, 14.5 billion dollars) in damages from Poland in a dispute over Polish insurer PZU, a senior Polish minister said Wednesday.

"Eureko estimates the damages at close to 36 billion zlotys," Poland's Treasury Minister Aleksander Grad told the commercial TVN24 news channel.

Grad said Poland had until the end of February to present its own estimate of the losses incurred by Eureko over a protracted dispute with Poland's Treasury over a 1999 contract in which Eureko acquired a 30 percent share in PZU for 3.1 billion zlotys.

Its stake has since risen to 33 percent minus one share but Eureko insists it is entitled to a further 21 percent under the terms of the privatisation contract.

Poland's treasury currently holds a 55 percent controlling stake in the country's largest insurance company.

The two sides agreed earlier this month to set up a task force that will set down the rules and timetable for further negotiations on finding what Grad called an "amicable solution" to nearly nine years of jousting over Eureko's stake in PZU.

Shortly after taking office in November, Poland's new liberalPrime Minister Donald Tusk pledged that his government would "look for ways and means to avoid a tragic end" to the dispute which could cost Poland dearly.

A string of Polish governments from both the left and right have fought Eureko's bid to take majority control of PZU, provoking a protracted legal battle for control over central Europe's largest insurance company.

In 2005, a London-based international arbitration court ruled in favour of Eureko, saying the Polish treasury had failed to uphold its side of the privatisation deal.

A Brussels-based appeal court also favoured Eureko in November, the same month that Poland's new pro-business government took office.

PZU made a net profit of 3.28 billion zlotys (886 million euros) in 2006 and 1.12 billion zlotys in the first half of 2007.

Sourc: afp.google.com