LJUBLJANA (Slovenia), March 19 (SeeNews) – Slovenia's Supreme Court said on Monday it has upheld an earlier decision by a lower court not to recognise Croatia's emergency legislation on that country's indebted Agrokor concern in Slovenia.

On March 14, the Supreme Court ruled that the law protecting the assets of Agrokor in the concern's home country, commonly known as Lex Agrokor, will not be recognised in Slovenia, it said in a statement on its website.

Agrokor is the majority shareholder of retailer Mercator in Slovenia.

The decision of the Supreme Court came in response to an appeal launched by Agrokor against a November ruling by the Ljubljana District Court, which said that "recognising the procedure under Lex Agrokor would contravene Slovenian law", because the ad-hoc insolvency legislation adopted by Croatia does not allow for equal treatment of creditors.

The Supreme Court agreed, saying on Monday that the public interest of Slovenia would be affected if a "foreign emergency administration procedure, which does not ensure compliance with the principle of equal treatment of creditors", is recognised.

The November ruling of the lower Slovenian court was brought in favour of Russia's Sberbank, Agrokor's biggest creditor, which had appealed a July decision by the same court to recognise Lex Agrokor as the basis for a foreign insolvency process in Slovenia. The court also threw out an appeal by Slovenia, before accepting that of Sberbank.

The rulings of the Slovenian courts allow Sberbank to seek to recover its claims held against Agrokor from the concern's assets in Slovenia.

The Russian bank in July last year already took a 18.53% stake in Mercator at a public auction, after earlier seizing the shares from Agrokor Investments B.V., which had offered them as collateral for a loan extended by the bank to Agrokor.

After Agrokor failed to repay the loan to Sberbank at the maturity date, the Russian bank initiated the process of enforcing the share pledge by way of selling the shares at a public auction, which was held on July 7 and in the course of which Sberbank acquired the shares.

Agrokor Investments B.V. is a company held by Agrokor owner Ivica Todoric.