Published in Nacional number 592, 2007-03-20

Autor: Berislav Jelinić


"Croatia Will Pay For The S-300 Sooner Or Later"

Former arms dealer Zvonko Zubak has engaged the services of leading German lawyer Sepp-Jörg Zoglmann: he tells Nacional why he is convinced that his client will succeed in collecting payment from Croatia for the S-300 rocket system

Zubak and ZoglmannZubak and ZoglmannLast Friday at Zagreb's Municipal Courthouse saw the continuation of the trial in the process being led against Croatia by former arms dealer Zvonko Zubak, who has for years tried unsuccessfully to collect payment for the S-300 surface-to-air system. Parts of the S-300 system arrived in Croatia between 1994 and 1996 via Pula Airport, and were displayed at a 1995 Croatian Army parade held at the Jarun recreation area. The public display of this system on the eve of the liberation actions, operations Flash and Storm, deterred the enemy use of MIG 29 fighter jets, which eased the liberation of the country and reduced the number of casualties and destruction.
The acquisition of the system went ahead following a decision by former Croatian President Franjo Tudjman, with the technical aspects of the deal covered by the RH Alan Company, then led by Major General Vladimir Zagorec, who was also serving as assistant to then defence minister Gojko Susak. The S-300 system was delivered to Croatia by the Winsley Finance Company, chaired by Petr Pernicka, while Zubak was the key man in connecting the two interested parties. The delivery of the S-300 system went ahead based on a Contract on a Future Contract signed on 19 July 1994 by Gojko Susak on behalf of the defence ministry and by Petr Pernicka on behalf of Winsley Finance. Croatia was under an arms embargo at the time and that formulation was put in the contract to formally avoid violating it. About 80 percent of the system came into Croatia, but it was never paid. As the war was over, there was no further interest in completing the system, and the supplier also did not want to complete the delivery without payment. As a result of this misunderstanding Zvonko Zubak, who formally assumed all claims, has for years now been trying to collect payment to the tune of over 200 million dollars. Vladimir Zagorec, who took part in the transaction as the former head of RH Alan, testified at the trial near the end of last year, opened, as of recently, to the public despite the objections of the Croatian side. Petr Pernicka, the secretive Czech who also testified, has accused him of telling lies at that hearing. Former defence ministers Pavao Miljavac, Andrija Hebrang, Jozo Rados and Zeljka Antunovic were to have appeared in court last Friday. Only Jozo Rados, however, showed up, with the others excusing themselves citing other obligations.

Because of the complexity and lengthy nature of this litigation Zvonko Zubak has, among other things, engaged Sepp-Jörg Zoglmann in his legal team. He is one of the most prominent lawyers at the Munich-based firm of Buse Heberer Fromm, employing 100 attorneys. In question is an international legal firm operating not only in Germany, but also with offices in New York, Sydney, Zurich and Spain's Palma. Zoglmann was born in 1942. He attended the universities of Munich and Salzburg. He started working at the legal firm of Buse Heberer Fromm in 1975 a specialised in economic crime and corporate law. Zoglmann has a wealth of experience in complex international legal suits, and also has the benefit of some excellent connections in the cream of the German political establishment. His father was a prominent member of former German foreign minister Hans-Dietrich Genscher's political party. He represented, among others, clients who fell out with Germany over deals on the acquisition of sophisticated submarines worth 2 billion dollars. He closed the case with a ruling in his client's favour. Although he was unwilling to comment on it, Zoglmann has, as Zubak's attorney, already met with Croatian President Stipe Mesic. What they discussed is, for the moment, unknown. Zoglmann was, as one of Zubak's attorneys, also last Friday present at Zagreb municipal court. The proceedings in the courtroom were simultaneously translated for him by German-language court interpreter Ines Mestrovic, while he concentrated intensely on its progress, especially the statements given by Jozo Rados. That the state is apprehensive because of the way the case is developing is indicated by the repeated insistence of the State Attorney's Office that the proceedings be closed to the public. But that did not happen, and the judge posed numerous logical questions during the proceedings from which it is evident that he is well acquainted with the details of the case. After the hearing Zoglmann agreed to give an interview for Nacional.

NACIONAL: How do you comment the testimony given by Jozo Rados and in general the odds of Zvonko Zubak winning the suit he has brought against the state?
Zvonko Zubak's case is developing very well. Jozo Rados was, as a witness, unable to offer any information as to whether the parts of the S-300 system were already paid for or not. Rados was also unable to offer evidence that the S-300 system was to have been sold to a third country, from which sale Zvonko Zubak would subsequently settle his claims. Rados had no knowledge of his own to this effect.

NACIONAL: Do you feel that Rados, as a witness, truly related all he knew, or did he leave you with the impression of a reserved witness, who did not reveal everything he knows of the facts of the case?
I cannot answer that question, because I do not know that. The only thing important to me is how Rados answered the decisive questions related to the essence of the dispute, and what he said to that effect was that he had no vital knowledge of it. In that sense Rados was for Zubak an entirely useless witness.

NACIONAL: How do you comment the insistence of the State Attorney's Office, i.e. the state, to have the case once again closed to the public?
All of the key details related to the proceedings, including military matters, are for the most part already known to the public, as the press has written on the subject comprehensively. There are, therefore, no more objective reasons why the proceedings should be closed to the public. The right to a public hearing is one of the key guarantees of the functioning of the rule of law. The public should be in a position to see how the court proceedings are carried out in this case and what reasons the court will have in this process for whatever ruling it adopts. The fact that the trial is open to the public is also a kind of control mechanism in relation to the court, similar to the role played by the press in relation to the state. The fact that the court, contrary to the request of the state's legal representative, opened the proceedings to the public indicates that the court is making an effort to lead the trial in keeping with the principles of the rule of law. This position of the court's gives me hope that the court, contrary to the interests of the state, will close these proceedings with a ruling founded in law. The law is in this case on the side of my client, which is evident from the quite simple circumstances that make up the essence of this case.

NACIONAL: What are these simple circumstances that are, in your opinion, in Zvonko Zubak's favour?
During the period in which the situation in Croatia was critical, Croatia was confronted with procuring modern armaments under an embargo. This was at that time very difficult. With the aid of Zvonko Zubak the state placed an order for a highly sophisticated system for anti-aircraft defence and received the main components of that system.
With the help of that system, displayed at the military parade held at Jarun in 1995, Croatia was able to deter the Serbian Army from continuing its airborne attacks on Croatian territory. The acquisition of that system achieved a cessation of the bombing of cities and Croatia's civilian population, and there were also no more airborne attacks against the Croatian Army. One of the reasons Croatia could be liberated was, among others, the acquisition of this system. The system protected Croatia from the great affliction that could have been visited upon it. Actually, one might expect that, in recognition of this success, there should be a readiness to execute payment obligations undertaken by the state without delay.

NACIONAL: How do you comment the fact that this has not been the case for 12 years now?
There have been no payments made to date for this system. That is the key point of this dispute. Croatia has in this transaction received a significant value in property from its contractual partner, which it has appropriated. Thanks to this appropriated value in property it was able to achieve key successes in the liberation war, but in spite of this did not fulfil its contractual obligations. In doing so Croatia in fact accrued wealth without any legal basis. It accrued wealth on the basis of someone else's ownership. The reason for this behaviour lies above all in the fact that the chief purpose of the system, that being to dismay the wartime adversary, was fulfilled. Besides, the amount of money needed to purchase the system was quite large.

NACIONAL: What kind of message is Croatia sending with this behaviour to those actors in the international community without whose support the S-300 system could not be acquired?
Croatia is making an effort to accede to the EU as soon as possible. The precondition to accession is the functioning of the legal system, which should meet the standards of the EU. In my understanding it is even more important that Croatia in this process must adhere to the rights and principles of the functioning of the rule of law. In conducting this procedure Croatia has demonstrated that it is, clearly for economic reasons, willing to gain illegal material benefit and in doing so comport itself unlawfully towards some of its citizens. This attitude is all the more evident if we take into consideration the arguments put forth by the state in challenging the supplier's legal action. The state is citing an allegedly unauthentic signature of former defence minister Gojko Susak, which is not at all crucial, as it is incontrovertible that the loin's share of the system was delivered and taken into possession. The contract was, therefore, in that sense for the most part realised, which could not have happened without the expressed consent of the Government. In order to challenge the effects of that signature in this set of circumstances, the state is undertaking steps that cannot be understood logically. The state is also citing the statute of limitations, while it is precisely the state that is responsible for the system not having been paid to this day. These are all, in fact, excuses, which clearly serve only to draw out the proceedings as much as possible. Since the state knows that the courts are hopelessly overburdened, it also knows that proceedings such as these could very likely last for a period encompassing the mandates of several Governments. So the state is using the difficult situation the courts find themselves in for ulterior purposes. In reality the state, in comporting itself in this manner, is denying effective legal protection to persons petitioning for their rights. Croatia is in comporting itself like this indicating that it, at least in this case, is not behaving in line with the principles of the rule of law. I am personally quite disappointed that, in spite of the clear facts of the case, the Croatian state is rejecting any kind of discussion on a settlement we have on several occasions endeavoured to offer, even though it is obvious that it received the S-300 system and that it will have to pay for it.

NACIONAL: What do you plan to undertake in order to assist your client in securing his rights?
There is a commission in the EU charged with verifying whether Croatia fulfils the preconditions related to the functioning of the rule of law, in order for it to accede to the EU. It has a mandate to follow and investigate the situation in Croatia in that regard. This commission files a quite comprehensive report every year on the situation in Croatia, and as to whether it is harmonising its legal system to the standards of the EU. I intend to inform that commission on the comportment of the Croatian Government, and request that it tackles this case in detail, so that it might form an opinion as to whether this case is being conducted in line with the law.

NACIONAL: Is it true that you possess quite firm indicators that some high-ranking representatives of the state tried to sell the S-300 system in the period from 2001 to 2002 to some high-risk countries, then under an embargo on the import of any kind of armaments? Do you intend to use this information as an ace in negotiating a solution to this dispute?
There are firm indicators that Croatia tried to sell the S-300 system to a third country, which were in fact critical countries, with whose government's negotiations were led. Witness Rados indicated that there had been discussion to this effect in the mentioned period, but that they had to be broken off because of growing resistance from developed Western countries. I have on three occasions sent letters to Prime Minister Ivo Sanader requesting his opinion and a discussion on the subject. Prime Minister Sanader has, unfortunately, not even answered my letters. In this reaction of his I also see a behaviour that is not in line with the normal functioning of the rule of law. Given the existing situation, any of the governments of developed Western European states would certainly not avoid disclosing their position on an issue like this. By its silence the Croatian Government is demonstrating that it is not prepared to address these demands. They are clearly aware that they will not be able to defend themselves from them.

NACIONAL: How did you come into contact with Zvonko Zubak? What can you tell us about the legal firm you work for and the clients you represent?
I cannot publicly comment the work of my firm and the clients we represent, as I would thereby violate attorney-client confidentiality. I can say only in general that I am a member of a legal firm for which over a hundred attorneys work. We operate in Germany, but also internationally. This is precisely why Zvonko Zubak turned to our legal firm. He concluded that we would be able to assist him in more easily securing his rights in Croatia precisely because his case has significant international scope.

NACIONAL: What conclusion do you expect to this case and how long do you think the proceedings will last?
The last hearing showed that the State Attorney's Office is still fighting to prolong the proceedings as much as it can. Although it has been led for years now, today the State Attorney's Office tried to introduce new witnesses to the proceedings, in order to further protract the case. In my opinion the court has so far led the proceedings well and independently. I expect, therefore, that the ruling will be in my client's favour, as there are no reasons not to rule in favour of the plaintiff's charges. It is difficult to speculate in what period of time this will come about.