Different Courts, Different Viewpoints: Article 26 of the Law on Enforcement and Security
Sunday, 26 March 2017
The improvement of efficiency and speeding up of enforcement proceedings were among the top priorities emphasized as justification for the enactment of the new Law on Enforcement and Security (Official Gazette of the Republic of Serbia, No. 106/2015 and 106/2016, hereinafter referred to as: “the Law”). Among the provisions intended to serve those goals was the rule set up by the Article 26 of the Law, providing that when deciding on objections and appeals, the court may not remand the first instance ruling and return the case for reconsideration.
Despite the clear and unambiguous wording, the Article 26 caused incoherent case law and the Supreme Court of Cassation was required to resolve the following issue:
Whether the higher court, as the court of second instance, is entitled to remand a ruling and return a case to the first instance court for reconsideration when deciding on an appeal of the enforcement creditor against the ruling by which the enforcement creditor’s motion to enforce has been rejected or dismissed?
The Civil Department of the Supreme Court of Cassation, at its session held on 23 January 2017, gave the following ruling thereon:
When deciding on an objection or an appeal, the court is not entitled to remand a first instance ruling and return a case for reconsideration, but rather to affirm the ruling and reject the appeal, to reverse the ruling by substituting its own decision, or to annul the ruling without referring the case for reconsideration.
The Civil Department of the Supreme Court of Cassation held that the provision prohibiting courts to remand the first instance rulings and return cases for reconsideration applies not only to rulings on enforcement, but also to other decision of the courts of first instance, e.g. rejections or dismissals of the motions and emphasized that rule prescribed by the Article 26 of the Law, due to its imperative character, linguistic clarity and lack of conflict with other provisions is to be interpreted based on its literal reading.
However, even though it looks that sticking to the ordinary meaning of the legal text and the ruling of the Supreme Court of Cassation might save one from ensuing conundrum, things are not that simple. For example, a case might happen where judge dismisses motion for enforcement, the enforcement creditor files an objection, the panel of judges considers the objection to be justified and thus a ruling on enforcement should be rendered.
The Commercial Disputes Department of the Commercial Appellate Court, at its session held on 7/8 November 2016, held that the panel of judges cannot reverse the ruling on rejection of the motion for enforcement by substituting its own ruling on enforcement, since that would deprive the enforcement debtor of his right to file an objection against such ruling to the panel.
[/vc_column_text][/vc_column][vc_column width=”1/2″][vc_column_text]The Commercial Appellate Court considered the Article 26 of the Law inoperable in such cases and suggested the panels, instead of reversing the rulings on rejection of the motions for enforcement by substituting its own rulings on enforcement, to remand the rulings and return cases for reconsideration by a judge, since only that would allow the enforcement debtors to exercise their right to file the objections.
As a conclusion, notwithstanding the linguistic clarity of the Article 26 of the Law, we do lack the answer on how is that Article to be implemented in different situations. This is even more the case due the different viewpoints of the Commercial Disputes Department of the Commercial Appellate Court and the Civil Department of the Supreme Court of Cassation. While the former insist that the implementation is impossible in several scenarios, the latter offers different solution for the case in which the second instance court is not able to conclude reliably whether an appeal is well founded and doubts whether it is possible to return the case for reconsideration. The second instance court should, first, consider on whom is the burden of proof and, if that is not sufficient, also hear the parties and participants in accordance with the Article 14 of the Law, in order to reach the decision.
It is, thus, questionable, whether the Law managed to improve the efficiency and sped up enforcement proceedings by obliging the second instance courts (or the first instance court panels in case of objections) not to return a case for reconsideration when reversing the ruling. This is even more the case since efficiency should rather be a means to achieve goals than a goal in itself.
On the other hand, the appeals were reintroduced in the enforcement proceedings for the purpose of uniform application of the law in court proceedings, both in front of general jurisdiction and commercial courts. Having in mind the different viewpoints of the Commercial Disputes Department of the Commercial Appellate Court and the Civil Department of the Supreme Court of Cassation, that goal is yet to be achieved and would probably require changes to the wording of the statute itself. Those changes would have to provide explicit answers to the following questions:
- how to proceed when the motion for enforcement is dismissed and the second instance court or the panel of the first instance court deciding upon the objection, considers the objection justifiable to the extent that the enforcement ruling is to be reached, and
- should the same legal remedies also be available to the enforcement debtor in case when the panel reversed the ruling on rejection of the motion for enforcement by substituting its own ruling on enforcement.
If you have any questions regarding the above, please contact Živković Samardžić Dispute Resolution Senior Associate Marko Trišić (marko.trisic@zslaw.rs), or any of your regular contacts at Živković Samardžić.
[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Click here to read this insight in Serbian.
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Živković Samardžić advises South Central Ventures on a transaction involving its portfolio company Dry Tools
Tuesday, 14 March 2017
Živković Samardžić, one of the Serbia’s leading full-service independent law firms has advised South Central Ventures (SCV) on a transaction involving Dry Tools, one of its portfolio companies operating in the software developing tooling sector. Following the transaction, Silicon Valley-based Alchemy Cloud Inc., a company targeting the specialty chemicals industry with an industry-leading, cloud-based product development platform, will acquire Dry Tools’ technology platform and hire its core team, while Dry Tools will, in exchange, become a shareholder of Alchemy Cloud Inc. At the same time, SCV shall become a sole shareholder of Dry Tools.
Dry Tools is a software development company that has built robust developer tools to streamline the software delivery process. Dry Tools help development teams address rapidly evolving product needs and deliver more value to customers by allowing developers to model applications through specifications and by working in fast delivery loops.
Alchemy Cloud Inc., company behind Alchemy, a cloud-based SaaS platform for the specialty chemical industry that facilitates the commercialization of new formulations, is based in San Francisco and has offices in both San Francisco and Novi Sad, Serbia.
SCV, who manages the Enterprise Innovation Fund (ENIF), a venture capital fund focusing on highly specialized, innovative small and medium-sized enterprises in the Western Balkans, was the lead investor in dry Tools and will do its follow-ons in Alchemy. Investors into ENIF are the European Commission (EC), the European Investment Fund (EIF), the European Bank for Reconstruction and Development (EBRD), Kreditanstalt für Wiederaufbau (KfW) together with institutional and private investors from the Western Balkans. The EUR 40 million fund is dedicated primarily to early stage and growth investments, intended to fuel the international business expansion and growth.
Živković Samardžić has supported SCV with their earlier investments in Serbia, including the investment in Dry Tools, and City Expert, an innovative, tech driven real estate sale and rental sector startup.
“We will continue to support SCV with their investments in tech startups and are proud to be positioned firmly as the go-to lawyers for venture and growth capital clients” said Managing Partner Branislav Živković.
Živković Samardžić team that has advised SCV on the transaction was led by Igor Živkovski, Senior Associate, and included Sava Pavlović, Associate.
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Živković Samardžić secures injunction for Prva against Pink International Company
Friday, 03 March 2017
After an application brought by Živković Samardžić on behalf of Serbian commercial television network with national coverage Prva, the Commercial Court in Belgrade has granted an interim injunction against Pink International Company, a parent company of Pink TV network in Serbia and member of the regional Pink Media Group.
The injunction restrains the broadcast of any television program under the name EXKLUZIV or any other name containing the word “exclusive” and distinctive elements of Prva’s registered trademark, whatever transliteration and/or regardless of typography used.
Prva applied for the injunction after Pink announced the broadcast of the program on the same topic (celebrity news and interviews), under almost the identical name and with logo strikingly resembling the logo of the program that was produced by Prva and aired on its channel for several seasons. Prva had the name and the logo of its program protected by the trademark more than six years ago.
The Živković Samardžić team securing the injunction for Prva was led by Kruna Savović, senior associate and Miloš Stojković, associate.
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Important Victory for the Slovenian Energy Company in the Montenegrin Court of Appeal
Tuesday, 28 February 2017
Živković Samardžić, one of the Serbia’s leading full-service independent law firms, has secured an important victory for its clients, Petrol d.d. Ljubljana and Petrol Crna Gora MNE d.o.o, the leading Slovenian energy company and its Montenegrin subsidiary, in their dispute with Konim d.o.o. Belgrade in the Montenegrin Court of Appeal.
The dispute concerned certain consultancy services provided by Konim d.o.o. Belgrade with regards to Petrol’s successful bid at the 2007 international tender for setting up a 50/50 joint venture company with Montenegro Bonus, a Montenegrin state-owned firm that was operating the oil and gas depots in the country. Konim d.o.o. Belgrade contended that it was entitled to receive a success fee in the amount of 1.46 million euros, pro rata to the amount of the investment as anticipated in the agreement to set up a joint venture company. However, the 2007 agreement entered into between Montenegro Bonus and Petrol was terminated in 2011, up to which point only some 10 million out of the anticipated 154.55 million euros were invested.
In its decision delivered to the parties recently, the Court of Appeal of Montenegro has finally confirmed the July 2016 decision of the Montenegrin Commercial Court that has rejected the plaintiff’s success fee claim. In delivering the judgment, the Court of Appeal of Montenegro held that Konim d.o.o. Belgrade was not entitled to a success fee solely on the fact that Petrol has entered into the joint venture agreement, but rather under the condition that the actual investment has taken place which, besides some 10 million euros, has never actually happened.
The Živković Samardžić team successfully representing Petrol and its Montenegrin subsidiary was led by Miloš V. Milošević, Dispute Resolution Partner and Marko Trišić, Dispute Resolution Senior Associate.
“For Živković Samardžić, it was important to prove our regional footprint, our capacity to support the client, an important player on the energy field of South Eastern Europe in this particular case, beyond Serbia as our base,” said Partner Miloš V. Milošević.
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IFLR 1000 recognizes Branislav Živković and Miloš Milošević as the leading lawyers
Friday, 14 October 2016
IFLR1000 Financial and Corporate 2017 directory has once again ranked Živković Samardžić, one of the Serbia’s leading law firms, for its financial and corporate practice as well as recognized Branislav Živković, Živković Samardžić managing partner as the leading lawyer in the M&A and Real Estate Finance and Miloš Milošević, partner and head of Dispute Resolution, as the leading lawyer in the Restructuring and Insolvency practice areas in Serbia.
Directory, released by International Financial Law Review, the market-leading financial publication for lawyers specialising in international finance in financial institutions, corporates and private practice, feature tiered rankings of the financial and corporate law firms and lawyers, recognized by their peers and clients to be the leading figures in their specialist areas, in more than 120 jurisdictions across the globe.
Branislav Živković is practicing law since 1988. His wide-ranging experience covers mergers and acquisitions, joint ventures, privatizations, acquisition and corporate finance, transactional tax aspects, complex commercial contracts and real estate and project finance.
Miloš Milošević joined Živković Samardžić in 2010, and 15 years in the judiciary, as a judicial clerk at the Commercial Court in Belgrade and the Supreme Court of Serbia, Judge at the Fourth Municipal Court in Belgrade and a Civil Law Appellate Chamber Judge at the District Court in Belgrade.
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Živković Samardžić advised Nestlé on Froneri ice cream joint venture with R&R
Monday, 03 October 2016
Živković Samardžić, one of the Serbia’s leading full-service independent law firms, has advised Nestlé, the world’s leading nutrition, health and wellness company, as a local counsel for Adriatic region, on its 50/50 joint venture with R&R Ice Cream, a leading ice cream company based in the UK.
Following the successful conclusion of the required regulatory clearances, Nestlé and R&R have completed the transaction to create Froneri, a new joint venture in ice cream, frozen food and chilled dairy. Nestlé and private equity firm PAI Partners, R&R’s owner, have equal equity interests in the joint venture. With sales of around 2.6 billion Euro, Froneri will operate in 22 countries across the world, employing around 15,000 people. As announced in April, the company will be headquartered in the UK and will have sites primarily in Europe, the Middle East, (excluding Israel), Argentina, Australia, Brazil, the Philippines and South Africa.
Globally, Nestlé was advised by Linklaters. The Živković Samardžić team successfully advising Nestlé on the Adriatic region aspects of transaction was led by Ksenija Golubović Filipović, partner and Igor Živkovski, senior associate.
“I would like to thank Verica Božić Aljinović, Head of Legal Affairs for Nestlé Adriatic Region and everyone at Adriatic Market legal team,” said Branislav Živković, Živković Samardžić managing partner. “Cooperating with both Nestlé Adriatic and the Linklaters teams on this transaction was a remarkable experience.”
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Waste-to-energy legal regime in Serbia
Sunday, 25 September 2016
While the European Commission has noted, in its 2015 assessment report, that Serbia is still at an early stage of aligning policies and legislation with the environment and climate change acquis, even though some progress in further aligning was made, the Serbian Government has, according to the Post-Screening Documents, undertook to fully harmonize its national legal and regulatory framework with respect to the environmental issues by 2018.
A right to a healthy environment is provided as a human right in the Serbian Constitution. The Law on Environmental Protection is a basic law in the environmental legal framework and it sets forth the integrated system of environmental protection composed of measures, conditions and instruments for sustainable management, preservation of nature balance, integrity, diversity and quality of natural values and conditions for survival of all living beings and prevention, control, reduction and rehabilitation of all kinds of environmental pollution. Waste management is defined as implementation of prescribed measures for handling with waste as a part of collection, transport, storing, treatment and disposal of waste, including supervision over those activities and care for waste management facilities upon their closure.
The Law on Waste Management sets forth types of waste and its classification, waste management planning, stakeholders, obligations and liability with regard to waste management, specific waste streams management, requirements and procedures for the issuance of permits, transboundary waste movements, reporting, waste management financing, supervision and other relevant aspects of waste management. Waste management, according to the Law, is based on the best practicable environmental option, self-sufficiency, proximity and regional approach to waste management, waste hierarchy, responsibility and polluter-pays principles.
Waste management institutional framework is composed of the National Assembly and the Government of the Republic of Serbia, that are providing the legal framework for sustainable waste management, economic instruments for waste management implementation. The National Assembly and the Government are also influencing the development of public awareness and setting-up a dialogue between the interested parties, aiming to set-up a waste management partnership. Competent authorities and organizations responsible for waste management are the ministry in charge of the environmental protection and other competent ministries, competent authorities of the autonomous province and the local self-government units, Environmental Protection Agency, Environmental Protection Fund and professional waste testing organizations.[/vc_column_text][/vc_column][vc_column width=”1/2″][vc_column_text]Some of the waste energy generating management options recognized by the Serbian Waste Management Strategy includes waste incineration, pyrolysis, gasification, use of waste with high thermal potentials instead of conventional fuels. In practice, in Serbia, waste with high thermal potentials is used instead of conventional fuels in cement production, where high temperatures and long periods of energy retaining ensure a complete burning of waste. Typical waste burnt in these processes includes municipal waste, tires, used solvents, refinery waste, fat bone powder, etc. According to the available data, by May 2015, the competent authorities released six licenses with the aim of utilization of the thermal energy. Out of six issued licenses, four were related to cement production.
Pursuant to the Law on Energy, in order to perform energy-related activities, one would need an energy license issued by the Energy Agency of the Republic of Serbia, and in order to construct energy facilities, an energy permit issued by the Ministry of Mining and Energy or the local self-government unit (depending on the type and power of the facility in case). Besides the energy license and energy permit, in order to construct energy facilities, it would be necessary to obtain a building permit, pursuant to the Law on Planning and Construction, from the ministry in charge of urban planning, an Autonomous Province authority or a local self-government authority (depending on the type, power and the location of the facility in case).
According to the recently adopted Decree on incentive measures for renewable energy sources power production and high efficiency combined heat and power production, incentives are provided, until the end of 2018 for hydro, wind, solar and geothermal power plants, biomass, biogas, landfill and sewage gas power plants and waste fired power plants. Incentive measures include the incentive period of 12 years, guaranteed feed-in tariff, no balancing responsibility and no balancing costs and free of charge access to the power transmission, i.e. distribution system.
Živković Samardžić overview on waste-to-energy legal regime in Serbia was recently published in OGEL 3 (2016) Special on Waste-to-Energy (WtE). To receive electronic off-print of the article, please subscribe to our newsletter via form provided on this page. You can also subscribe to the Oil, Gas & Energy Law (OGEL) peer-reviewed academic journal covering all aspects of law pertaining to oil, gas, and energy in general, where our article was originaly published, here.
For more details or any questions, please contact Slobodan Kremenjak at slobodan.kremenjak@zslaw.rs, Miloš Stojković at milos.stojkovic@zslaw.rs, or any of your regular contacts at Živković Samardžić.[/vc_column_text][/vc_column][/vc_row]
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Competition clearances secured for Petrol d.d. Ljubljana in Serbia, Montenegro and Macedonia
Monday, 08 August 2016
Živković Samardžić, one of the Serbia’s leading full-service independent law firms, has obtained its client, Petrol d.d. Ljubljana, the leading Slovenian energy company and an important player on the energy field of South Eastern Europe, competition clearances in Serbia, Montenegro and Macedonia, with respect to Petrol’s acquisition of control over the Slovenian natural gas trader Geoplin. (more…)
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Another Supreme Court of Cassation Victory in a Multimillion Shareholder Dispute
Wednesday, 13 July 2016
Živković Samardžić’s dispute resolution team secured Supreme Court of Cassation victory for Vlade Divac, former professional basketball player and incumbent President of the Serbian Olympic Committee, in proceedings related to certain share transfers in an alcoholic beverages producer and a water bottling plant.
Vlade Divac was a defendant in a multimillion litigation initiated by Vojin Djordjević, Serbian businessman, who requested certain share transfer agreements related to shares in an alcoholic beverages producer and a water bottling plant, he entered into with Mr. Divac, to be nullified or rescinded, since having led to a different outcome than the one envisaged originally in a Letter of Intent signed between the parties in November 2006.
After the Commercial Court in Belgrade decided in favor of Mr. Divac in 2013, as well as the Commercial Appellate Court in the appellate proceedings in 2014, the Supreme Court of Cassation has found that despite the fact that the ownership structure in two companies was indeed different than the one envisaged originally in the Letter of Intent, it happened due to the plaintiff’s failure to act in accordance with his contractual obligations rather than an error or deception. Thus, the Supreme Court of Cassation has finally confirmed the decisions of lower-instance courts
Furthermore, the Supreme Court of Cassation confirmed the legal standpoint of the Serbian jurisprudence that share transfer agreements after they have produced effects by registration of the transfer in the Company Register, cannot be subject to annulment or rescission on the grounds provided in the Law on Contracts and Torts, but rather the proceedings for the nullification of the incorporation of the company, as provided in the Companies Act, should be initiated.
Živković Samardžić team successfully representing Mr. Divac was led by Miloš V. Milošević, Dispute Resolution Partner and Marko Trišić, Dispute Resolution Senior Associate.
Photo by krik.rs
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Živković Samardžić achieves Supreme Court of Cassation victory for Vojvodjanska banka a.d.
Tuesday, 05 July 2016
Živković Samardžić’s dispute resolution team has recently achieved a major victory at the Supreme Court of Cassation. The firm has represented Vojvodjanska banka a.d. Novi Sad, member of the National Bank of Greece Group in civil proceedings related to a bank guarantee issued by legal predecessor of Vojvodjanska banka a.d. to Moscow Investment bank as a collateral for USD 3 million loan granted to petrochemical plant HIP Pančevo.
Vojvodjanska banka a.d. Novi Sad was a defendant in a litigation initiated by PFHC Establishment, a company from Liechtenstein to whom receivables related to USD 3 million loan originally granted by Moscow Investment bank to the Serbian petrochemical plant HIP Pančevo, were assigned. Once the original loan was granted, legal predecessor of Vojvodjanska banka a.d. issued a bank guarantee as a collateral.
In lengthy proceedings, it was established that Moscow Investment bank returned the original of the guarantee with an explanation that the transaction was completed, but later on had sent a swift message demanding the guarantee back and claiming that it was returned by mistake of an employee.
The Commercial court in Pančevo initially rejected all PFHC Establishment claims in 2010. However, that decision was quashed and a retrial ordered by the Commercial Appellate Court upon plaintiff’s appeal in 2013. Živković Samardžić were retained to represent Vojvodjanska banka a.d. since the commencement of the retrial. The first instance judgement in the retrial was once again in favor of Vojvodjanska banka a.d., but this time it was confirmed by the Commercial Appellate Court in September 2015 and now finally by the Supreme Court of Cassation.
In essence, the Supreme Court of Cassation confirmed the standpoint of Živković Samardžić lawyers that the form prescribed for interbank communication concerning bank guarantees was not followed by the Moscow Investment bank’s swift message sent to the defendant after the original of the guarantee was returned, and for those reasons the swift message produced no legal consequences.
The Živković Samardžić team successfully representing Vojvodjanska banka a.d. was led by Miloš V. Milošević, Dispute Resolution Partner and Marko Trišić, Dispute Resolution Senior Associate.
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