The government will seek an out-of-court settlement in its dispute with Nomura over the forced administration of Czech bank IPB, which the government took away from the Japanese investment bank in 2000, when IPB was on the verge of bankruptcy.

Having won arbitration proceedings in London in March and Zurich in September, Nomura celebrated another victory after Prague's Municipal Court rejected a complaint Oct. 5 filed by ČSOB, the bank that was given IPB after Nomura's departure. ČSOB sued Nomura for allegedly stripping IPB of key assets before abandoning it.

ČSOB cried foul over Nomura's sale of controlling shares of breweries Pilsner Urquell and Radegast from IPB's portfolio.

When it initially purchased the breweries, Nomura didn't pay for them in cash, but in IPB stock, which, according to a government report, later became worthless due to mismanagement. Nomura sold the breweries to South African Breweries for 22 billion Kč ($979.5 million) in 1999.

Later, ČSOB spokesman Milan Tománek said ČSOB was likely to continue legal action.

Finance Minister Vlastimil Tlustý initiated a September meeting with Nomura representatives, suggesting that both parties withdraw their pending lawsuits.

"I asked the representatives of Nomura and of ČSOB whether they preferred certainty in the form of a mutual agreement over uncertain arbitration results because the pending arbitration cases could end either way," Tlustý said. "They all said that they did, and so it gave us room for further negotiations about settling the dispute once and for all."

The government considered settling with Nomura in 2002 and 2005, but didn't.

Tlustý seems ready to push for a settlement. He agreed on forming negotiating teams with Nomura and ČSOB, which should begin talks in the next few months.

Tlustý hopes to avoid the possibility that the government will need to compensate Nomura, which would further deepen the public finance deficit, now worth almost 1.3 trillion Kč. The country has spent almost 500 million Kč paying costs related to the arbitration proceedings.

The state may have to pay 40 billion to 70 billion Kč for failing to protect Nomura's investment in IPB.

The London Arbitration Court concluded March 17 that the government did not adequately support IPB from 1998 to 2000, forcing it to the brink of bankruptcy before wresting it from Nomura and handing it to ČSOB. The London tribunal said that, while forcing Nomura away from IPB in 2000 was legitimate, the government discriminated against Nomura by failing to bail out IPB beforehand. The government spent about 400 billion Kč helping other banks before privatizing them in late 1990s.

The Swiss Federal Supreme Court confirmed the London decision in September. The London tribunal will determine the compensation in 2008.