entered into a Dispute Settlement Agreement that created grounds for the elaboration and acceptance of final progress payment certificates according to contracts for the second stage B (supply and installation of electric, road and other equipment, and the reconstruction of the existing road traffic surveillance centres and the construction of windbreaks) and for the bypass road of Rijeka (supply works and installation of electrical equipment for routes and tunnels, 110 kV underground transmission line and noise barriers at the bypass road of the City of Rijeka, section Orehovica Junction – Diračje Junction).

Former no recognition of additional works listed in bill of quantities or contingencies, and of the right to bonus on behalf of early finalization of works, and of expenses arising from the need to engage financial resources due to Employer’s untimely payments, has resulted in Contractor filing charges at the Zagreb Court of Commerce, and the Permanent Arbitration Court at the Croatian Chamber of Commerce. This Dispute Settlement has created prerequisites for making an arbitral award, or a court dispute settlement.

The Dispute Settlement has been established to the amount of HRK 90.9 mil (VAT excluded), and represents a final recognized amount of financial claims of the Contractor made against the Employer. Both Parties waive any rights to further claims as regards the contracts in question, while the payment of the said amounts shall follow in the shortest possible period and according to Employer’s possibilities.

Although Dalekovod’s total claims against ARZ amounted to a higher sum (HRK 122.0 mil), after consulting with its legal experts, which have predicted a lengthy dispute, the Management Board has decided to give in and accept a lower amount preferring to receive money sooner than later and bearing in mind the Company’s grave liquidity.

This act has successfully ended Dalekovod’s years-long efforts to collect its claims based on works as defined by contract, while the realisation of payment of the Dispute Settlement will have a significant influence on the Company’s improved liquidity.

Dalekovod d.d.