CEE Legal Matters

Category: Slovakia

  • Vojtech Palinkas Moves from Alen & Overy to MCL in Bratislava

    Vojtech Palinkas Moves from Alen & Overy to MCL in Bratislava

    Former Allen & Overy Senior Associate and Head of Real Estate in Slovakia Vojtech Palinkas has joined Slovakia’s MCL law firm, where he will co-head the Real Estate, Projects, M&A, and Corporate law practices.

    Palinkas has more than 20 years’ experience, with two years at Freshfields Bruckhaus Deringer before the last 18 at A&O. MCL describes him as “well respected in the market and is considered to be one of the leading real estate, M&A and corporate lawyers in the country,” and says that “throughout his career, Vojtech advised both local and foreign clients on a variety of corporate and commercial transactions, including acquisitions, disposals, joint ventures and corporate restructurings.” According to the firm, “his experience spans various countries, including Czech Republic, Serbia, Slovenia, UK, and USA, and industry sectors, including aviation, energy, gaming, financial institutions, industrial, IT, manufacturing, mining, private equity, railways, retail and telecommunications/media and technology.”

    Palinkas is a 1999 graduate in Law from Comenius University in Bratislava, and he has been a member of the Slovak Bar Association since 2002.

    The arrival of Palinkas increases the number of partners at MCL to four. 

    MCL Co-Managing Partner Martin Jurecko explains: “Vojtech’s appointment is a fantastic boost to our practice and will complement our existing transactional, tax and contentious teams. Given his excellent reputation and outstanding experience in the market, Vojtech is the perfect fit to lead the team and maximize the benefit to our clients. MCL law firm continues to support the growth of its office based on confidence in the Slovak market. We believe that with  Vojtech we will be able to grow in all relevant aspects including number of served clients, extension of coverage of the industry sectors, turnover and profit growth and positioning ourselves within the most prominent law firms in the country and throughout region.”

    “It’s very exciting to join a small group of outstanding partners coming from some of the most prestigious law firms in Slovakia,” Palinkas added, “which, despite its short presence on the market, was able to prove its ability to deliver an excellent legal and tax services for the clients and handle complex clients’ assignments.”

  • White & Case Advises Lead Managers on Slovakia’s EUR 1 Billion Standalone Bond Issuance

    White & Case Advises Lead Managers on Slovakia’s EUR 1 Billion Standalone Bond Issuance

    White & Case has advised Deutsche Bank, HSBC France, Natixis, Societe Generale, and Vseobecna Uverova Banka as lead managers on the Slovak Republic’s bond issue of EUR 1 billion 0.750% notes due in 2030.

    According to White & Case, the notes were offered by way of a Regulation S offering, and they have been listed on the Bratislava Stock Exchange. White & Case reports oversubscription levels of more than 5 times, and reports that the offering was well received by a diversified investor base.

    The White & Case team was co-led by Partners Juraj Fuska in Bratislava and Stuart Matty in London and included Associates Radoslav Palka in Bratislava and James Clarke in London.

  • Taylor Wessing Advises Zuzana Caputova on Succesful Campaign for Slovak Presidency

    Taylor Wessing Advises Zuzana Caputova on Succesful Campaign for Slovak Presidency

    Taylor Wessing is reporting that it provided Slovakian president-elect Zuzana Caputova and her team with legal advice on contractual matters and opinions and advice on the operative agenda connected with her successful campaign for President.

    Caputova, who is a lawyer and anti-corruption campaigner, is a member of the brand new Progressive Slovakia party. She won Slovakia’s March 30 election with 58.4 of the second-round vote, defeating European Commission Vice President Maros Sefcovic. When she takes office on June 15, 2019 she will become the first woman to hold the Slovak presidency, as well as, at 45, the youngest president in the history of the country.

    According to a Time magazine report, “Caputova was born to a working-class family in the town of Pezinok in what was then central Czechoslovakia. The divorced mother of two daughters rose to prominence and was nicknamed the ‘Erin Brockovich’ of Slovakia after leading a successful case against a toxic landfill that was planned in her hometown in 2016. Her 14-year-long case against the wealthy land developer involved organizing protests, filing lawsuits and writing petitions to the European Union.”

    The Taylor Wessing Bratislava team advising Caputova and her campaign included Partners Radovan Pala and Andrej Leontiev and Junior Partner Dominika Gricova.

    Image source: Tomas Halasz 

  • Clifford Chance Advises Vseobecna Uverova Banka on First Syndicated Slovak Covered Bond Transaction

    Clifford Chance Advises Vseobecna Uverova Banka on First Syndicated Slovak Covered Bond Transaction

    Clifford Chance has advised Vseobecna Uverova Banka, a.s., a Slovak subsidiary of Intesa Sanpaolo, in connection with the update of its EUR 5 billion covered bond program and its inaugural syndicated EUR 500 million issuance listed on the Luxembourg Stock Exchange.

    According to Clifford Chance, “the transaction represented a landmark for the covered bonds market in Slovakia, as it was the first syndicated issue of covered bonds under new regulation that was aimed primarily for international institutional investors. It was also the largest issue of a similar type of securities in the country’s history and the investors’ interest has exceeded the expectations of the issuer and sent a strong signal to the market.:

    Clifford Chance’s Slovak-law team based in Prague was led by Senior Associate Stanislav Holec, assisted by Junior Associate Andrej Havko and Senior Associate Vladimír Rylich. The firm’s English-law team based in Milan was led by Partner Filippo Emanuele, with day to day support from Senior Associate Jonathan Astbury. Clifford Chance Luxembourg provided regulatory advice in connection with the securities listing. 

  • CMS and Peterka & Partners Advise on Gramercy Europe Acquisition of KiK Logistics Centre in Slovakia

    CMS and Peterka & Partners Advise on Gramercy Europe Acquisition of KiK Logistics Centre in Slovakia

    CMS has advised Gramercy Europe, acting through its fund Gramercy Property Europe III, on the successful acquisition of the KiK Logistics Centre near Dunajska Streda, Slovakia, from Go Asset and ECE European City Estates. Peterka & Partners advised the sellers on the deal.

    CMS describes London-based Gramercy Europe as “a leading real estate investment fund manager focused on single tenant logistics and light industrial properties located across Europe,” and says that “it has a focus on Germany, the Netherlands, France, and Spain although it has an active investment pipeline covering many European countries – and the KiK Logistics Centre is Gramercy’s first investment in Slovakia.”

    CMS reports that the KiK Logistics Centre, which is leased by the German textile discount store chain KiK (KiK Textilien und Non-Food), a subsidiary of German holding company Tengelmann Group, has been built and developed in the area of Kostolne Kracany, near Dunajska Streda. According to the firm, “the facility offers more than 55,000 square meters and serves as distribution centre to supply Austria, Slovakia, Czech Republic, Poland, Hungary, Croatia, and Slovenia. The center was built in cooperation with the Atrios architectural studio. It was the first logistics park in Slovakia awarded under DGNB Certification System with a gold certificate by the Austrian sustainable building council.”

    The CMS team advising Gramercy was led by Partner Helen Rodwell and included Partner Pavla Kreckova, Senior Associate Frances Gerrard, Counsel Michal Hutan, Associates Dusan Predny and Martin Balaz, and Lawyers Dusan Vanek and Michaela Nemethova.

    The Peterka & Partners team was led by Senior Associate Lubomir Lesko, working with Senior Associate Marian Lauko and Associate Stanislava Kissova.

  • Zuzana Simekova Becomes Co-Head of Dentons’ Life Sciences Group Across Europe

    Zuzana Simekova Becomes Co-Head of Dentons’ Life Sciences Group Across Europe

    Dentons has appointed Bratislava-based partner Zuzana Simekova as Co-head of the Europe Life Sciences group, joining Paris-based Partner Jean-Marc Grosperrin, who has led the group since its inception in 2014.

    Jean-Marc Grosperrin commented, “Our Europe Life Sciences group has traditionally been built on the strength of our market-leading practice in Paris which has been expanded throughout Europe. As we look to the future, we plan to start a new phase aimed at further strengthening our capabilities across Europe. So I am very pleased to welcome Zuzana, a leading Life Sciences lawyer in the CEE region, to the leadership team.”

    Zuzana Simekova commented, “I feel honored to be appointed to this role. Our Europe Life Sciences practice has a very strong standing and I am very much looking forward to enhancing, alongside Jean-Marc and our colleagues, our offering of excellent, full-service support to the clients in this dynamic sector.”

    According to Dentons, Simekova has been practicing law for more than 15 years and focuses primarily on life sciences and competition law. The firm reports that she “advises clients in the pharmaceutical sector in CEE and Europe on a wide range of regulatory issues, including clinical trials, market access, pricing and reimbursement, compliance, distribution and sales models, and advertising. She also has extensive experience in providing regulatory advice and obtaining competition clearance of M&A and corporate transactions in the life sciences sector.” According to Dentons, “she has worked for clients such as GE Healthcare, Roche, and Eli Lilly, and recently she advised Sanofi across numerous European countries in relation to the sale of its generic business division in Europe, one of the largest transactions in the life sciences sector in recent years [for] 1.9 million EUR.”

    Tomasz Dabrowski, CEO of Dentons Europe, commented, “As part of our strategy for Europe, we are committed to enhancing our capabilities in key practices and sectors. Under the capable leadership of Jean-Marc and Zuzana, we will enhance our offering of innovative services and add even more value to our clients in the life sciences sector.”

  • The Buzz in Slovakia: Interview with Katarina Cechova of Cechova & Partners

    The Buzz in Slovakia: Interview with Katarina Cechova of Cechova & Partners

    “The biggest current concern in Slovakia is the non-operating Constitutional Court,” says Cechova & Partners Senior Partner Katarina Cechova, who claims that for the first time in its history the Slovak Republic faces real concerns about the future of its major judicial institution.

    The problems at the Court are the result of an inability to replace the nine whose terms concluded on February 15, 2019, leaving only four judges currently active. The Slovak Parliament failed to find sufficient consensus to confirm any of the 37 candidates for the post.

    Cechova says the main issue that sparked the situation is the involvement of controversial former Slovak Prime Minister Robert Fico in the election process. Fico resigned as Prime Minister in March 2018, following national protests that arose after the widely-reported murder of investigative journalist Jan Kuciak and his fiancé, Martina Kusnirova. Investigations into Kuciak’s death, she says, raised suspicions about connections between Fico and the Italian mafia and oligarchs. 

    “Fico’s ambition was to become the Chairman of the Constitutional Court,” says Cechova. His nomination was not initially accepted, she reports, as the Constitutional Committee of the Slovak Parliament expressed doubt about his ability to satisfy mandatory qualifying criteria. As a result, he was given extra time to collect evidence, she says, “which he did, although it was still disputed by high number of members of the Constitutional Committee.”

    According to Cechova, in support of his controversial candidacy, members of parliament from the Smer party called for a secret ballot — a call that was supported only by People’s Party Our Slovakia, the Slovak ultra nationalist party. When that proposal failed, both parties called for a general boycott of the February 12 election, and followed through on their promise to destroy their ballots. As a result, no judges were elected.

    A new election has been scheduled for the end of March, shortly after the country’s upcoming March 16 presidential election. Tensions, Cechova reports, remain high, as even if candidates are elected by the Parliament, the final selection of judges is subject to the decision of the Slovak President, and, although Fico has now withdrawn his own candidacy, his party may seek to again postpone the elections until a new president — one who is potentially more sympathetic to the candidates they prefer — is in office.

    In the meantime, Cechova says, the failure to appoint judges to the court “has a significant impact on the protection of human rights and constitutionality in Slovakia, because the Constitutional Court is already overwhelmed by petitions needing to be addressed, and now the required number of judges necessary to deal with the cases does not exist.” As a consequence, she says, the resulting paralysis of the court has a direct impact on the everyday work of lawyers and their clients, slowing down the already too-long process of case resolution in the Constitutional Court. 

    Overall, Cechova says the entire situation has raised unprecedented legal questions about how to deal with elections in cases of delay – a situation that Cechova describes as “unfortunate,” because “it happens in countries like ours, where democracy is interpreted not in a proper manner.” 

    On the brighter side, Cechova says that Slovakia is doing well economically, with low unemployment rates and high stability, and an automotive industry that is thriving and demonstrating the potential to attract even more foreign investors. “We are the strongest economy in production of cars,” she says. “Of course, that will end at some point in time, but for the next four or five years we are set.” Yet, despite the country’s economic success, she sighs. “It is extremely sad that the country, which is so lucky with its current economic situation, is unable to better govern itself.” She notes that, in these circumstances, the role of lawyers is more valuable than ever. “Lawyers are the ones the society is looking to: they are the ones who ensure the rule of law and protection of human rights.”  

    Cechova says that “the legal market is very tough and competitive,” with space for both international and local law firms to do well. In addition, the market has become more attractive for young lawyers, as the mandatory traineeship period has been shortened from five years to three. Cechova explains that the five-year mandatory traineeship made the legal profession unappealing, “so there was a real pressure to reduce it.”

  • Kinstellar Advises Veolia Energie International on Acquisition of Power Plant from Slovintegra

    Kinstellar Advises Veolia Energie International on Acquisition of Power Plant from Slovintegra

    Kinstellar has advised Veolia Energie International on the acquisition of Slovintegra Energy from local investment group Slovintegra. Havel & Partners reportedly advised Slovintegra on the sale.

    The acquisition included a purchase of a combined-cycle natural gas-fired power plant in Levice in southern Slovakia and the provision of balancing and ancillary services, and the operation of its own feeder pipe to the Eustream gas pipeline. The transaction was finalized in February 2019 following the approval of the Slovak Antimonopoly Office.

    Veolia Energie International has been operating in Slovakia since 1992. The company’s main activities are production and distribution of heat and hot water, provision of services to industrial clients, design of energy solutions, and building management.

    Established in 1995, Slovintegra focuses investing activities in new technologies, energy, and finance.

    The Kinstellar team in Bratislava consisted of Partner Viliam Mysicka and Associate Vladimir Simkovic.

    Editor’s Note: After this article was published, Havel & Partners confirmed its involvements in the deal. Its team consisted of Partner Vaclav Audes and Senior Associate Tomas Navratil.

  • The Slovak Tax Tiger Succumbs to Political Populism – Retail Chains Levy Likely

    In its December session the Slovak parliament will decide whether to adopt a sectoral tax in the form of a 2.5% levy on net quarterly turnover of retail chains (the “retail chains levy”). The official purpose of the bill under consideration is to reach the strategic goal of food self-sufficiency, to finance the creation of mechanisms supporting Slovakia’s agricultural production and food industry, and to weaken the allegedly dominant position of large retail chains as regards their profits. The annual yield of the new tax is estimated at approximately EUR 150 million – a figure on which the Ministry of Finance relied in calculating its state budget for 2019.

    The new regulation – nicknamed the “tax on food” – quickly drew fierce criticism as discriminatory, arbitrary, market-distorting, and violating expectations of equal treatment. Nonetheless, the government coalition insists on moving forward with it, making its introduction on January 1, 2019 likely. It is regrettable that Slovakia, once known for its simple and investor-friendly “flat tax” system, is now steering towards discriminatory sectoral tax solutions aimed particularly at foreign investors. Similar retail taxes were introduced in Hungary and Poland in recent years but were either watered down or never collected due to the violation of EU rules and the opposition of the European Commission. 

    The Slovak bill was not introduced by the government but by a group of deputies from a junior coalition party – the Slovak National Party – allowing its supporters to circumvent the interdepartmental review and expert debate process. Politicians backing the draft bill are openly declaring that the retail chain tax is targeted at the largest foreign-owned chains, which allegedly harm the interests of Slovak farmers and food producers. And in order to defend the bill, various unfounded accusations have been put forward, such as massive tax avoidance, chicanery of employees, abuse of dominant positions, and liquidation of small retailers. It is not clear how the new retail chains tax can remedy this alleged misconduct. 

    For the purposes of the levy, a retail chain is a group of shops operated under the same brand or by the same owner(s) and having a common design and marketing strategy in at least two Slovakian districts. It has also been proposed that at least 10% of their net turnover must be generated from the sale of food products. However, the tax is to be levied on the whole net turnover of retail chains, regardless of whether that turnover is generated from the sale of food or other retail products. This would mean that the largest drugstore markets fall under the scope of the retail chain tax as well. Having their entire turnover taxed would naturally lead to a far-reaching distortion of the drugstore products retail market. Due to this, an amendment increasing the threshold to a 25% food products turnover has been announced.

    The original draft bill has been construed to exempt small retailers and to catch all large supermarkets, including chains owned by Slovak entrepreneurs. The amount of the tax rate (2.5% of turnover) has not been justified by any economic analysis, and it has become clear that most retail chains operators (particularly Slovak ones) would not be able to withstand its effect.  Based on the ongoing discussion in parliament, it seems that the final version will go even further down the discrimination line by exempting all food retailers except the largest market players, owned mainly by foreign companies. 

    Following our analysis, in our view the proposed retail chains tax will not only violate EU rules banning discrimination and state aid but – taking into account case law of the Slovak Constitutional Court – will also clearly be unconstitutional. At the very least, it breaches the constitutional principle prohibiting discrimination in the right to own property. Of course, Slovakia has the right to decide on its taxation system or on the objective of different taxes, which to some extent legitimately interfere with the right to own property. However, taxes cannot be set in a discriminatory manner and without reasonable justification. Moreover, the new tax may have suffocating effects resulting in market distortion and market exits. And if the scope of the retail chain tax were to be further narrowed in order to leave out medium-sized Slovak chains, it would most probably not comply with EU state aid rules. Thus, if the retail chains tax is introduced, it will almost certainly be challenged before the Slovak Constitutional Court, which may freeze its effect until deciding on its constitutionality.

    By Radovan Pala, Managing Partner, and Jan Lazur, Partner, Taylor Wessing Bratislava

    This Article was originally published in Issue 5.12 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

  • Former A&O Partner Hugh Owen: One Year On

    At the end of 2018 long-time Allen & Overy Partner Hugh Owen announced that, after 23 years at A&O — 19 of which were spent in CEE — he was stepping away from that Magic Circle firm to start his own consulting firm, called Go2Law. A year later, we checked in on him.

    It has been a little over a year since I retired as a Partner at Allen & Overy and became a Consultant.  It has been a fascinating episode of my life.

    While I made the decision to retire in a very rational way, I still found myself shortly after the decision thinking: “What have I done?”  A myriad of emotions ran through me: fear, relief, excitement, a sense of being slightly lost, fear, a loss of confidence, confusion. Did I mention fear?

    I had worked for the same firm for 23 years, with a huge platform, allowing me to take so much for granted.  When you set out on your own, you suddenly have to address really basic questions, like what is my IT system going to be, how do I create a website and what should it look like, how do I set up a law firm, and so on. Things which of course many of you already experienced some time ago.

    Suddenly I felt very alone. Maybe I needed a law firm platform after all?  A number of firms spoke to me about joining them, and that was a very positive experience.  I learned a lot, and I had some very open and interesting discussions, for once being able to talk to people about their plans and goals – not just from across the negotiating table, and not speaking to them only as competitors.  

    But after much thought, I decided eventually to stay where I was, and I set up my own new little law firm.  I wanted to focus on work that was specifically deal-oriented, satisfying my taste for the battle-smoke of tough negotiations.  

    Then, bit by bit, other people started to call me.  Former colleagues, and lawyers from SEE relationship firms, asked how I was doing, and whether I was still available to help.  Previous clients called too, sometimes to work out how I could continue to support them, and sometimes just for a friendly chat.  And sometimes other law firms that I hadn’t worked with before began to call me as well to ask if we could work together.

    I started to realize that these friendships, built over many – 15, sometimes 20 – years, were real, and that they mattered.  And that people were interested in me as a human being and not just a service-provider.  I experienced an affirmation of goodwill and good nature that should give all of us courage and hope that many things are possible with a little help from your friends.

    And talking of friends, we turn to how things worked out with my former firm. Well, not only did A&O provide formal support on my transition into “civilian” life, but pretty much all of the people at the firm that I had worked with over the years got in touch too. They asked, “Ok, so how will we continue to work together?”

    So I decided that I would like to continue to work as a Consultant, as part of the A&O team, on a non-exclusive basis.  As a result, since I retired as a partner I have already worked on around ten transactions with my former A&O colleagues.  But I have also worked with some of A&O’s relationship firms, and some entirely new firms, on another seven transactions as well.

    But more than that, my former colleagues at A&O still invite me to the off-sites, and still invite me to some events, not as a formality to an alumnus, but just because we still like spending time together.  And perhaps it is this element that most pleasantly surprised me.  A partner at a SEE law firm signed off one conversation with: “Don’t forget you worked for nearly quarter of a century with a Magic Circle Firm.”  The professionalism and friendship extended to me from A&O in the past year or so since I left the firm means a great deal.

    The Go2Law set-up seems to work very well: those who want to work with me alongside A&O can still do so; those who for various reasons would like to work with me as Go2Law can do so too.  The role can be as large or small as suits the client.  Everyone is a winner, because you get what you need, when you need it.  And I don’t really worry too much any more when there isn’t something to do for a few days.  Actually, I really enjoy it.

    From time to time I have put a few small comments out there on LinkedIn – a deal I just signed, usually, or a ranking in a legal directory.  And while I would hardly want to be seen as some kind of social media junkie, this has also been a surprisingly strong source of encouragement.  When you get 10,000-15,000 views (even if half of those views are probably people seeing it by accident), or x hundred “likes,” the fact that someone out there has taken the trouble just to give you that little thumbs up gives you a feeling that people actually care.  Like a friendly wave.

    So thanks to everyone for their support – and for reminding me that sometimes the smallest of actions can be a great help, support, and inspiration.

    By Hugh Owen, Partner, Go2Law

    This Article was originally published in Issue 5.12 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.