Commercial Appellate Court Victory for Basketball Executive
Sunday, 24 February 2019
Živković Samardžić’s dispute resolution team secured Commercial Appellate Court victory for Vlade Divac, a professional basketball executive and retired player, currently serving as the vice president of basketball operations and general manager of the Sacramento Kings, in one of the series of cases instituted against Divac by Vojin Đorđević, Serbian businessman and former owner of a water bottling plant, where Mr. Đorđević claimed more than EUR 10 million compensation for the shares in the plant.
As reported here previously, Živković Samardžić’s dispute resolution team also acted for Vlade Divac in a shareholder dispute amongst the same parties, where the Court of Cassation decided finally in 2016 not to nullify or rescind certain share transfer agreements related to shares in an alcoholic beverages producer and a water bottling plant, thus leaving the plant in Divac’s ownership.
Latest decision of the Commercial Appellate Court is brought in a case where Đorđević claimed alleged unpaid balance over the full value of the water bottling plant shares. However, the court found that it was Mr. Đorđević who failed to conduct as agreed and stipulated by the Letter of intent in 2006, by failing to, inter alia, increase the capital of the company, as well as to transfer certain licenses and clear certain mortgages, thus deciding in favor of Mr. Divac.
The Živković Samardžić team representing Vlade Divac was led by Marko Trišić, Dispute Resolution Partner and Deputy Head of Živković Samardžić Dispute Resolution Practice.
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Commercial Appellate Court Victory in a Shareholder Dispute for Živković Samardžić Client
Wednesday, 31 January 2018
Živković Samardžić, one of the Serbia’s leading full-service independent law firms, has secured an important victory for its client TITAN, an international cement and building materials producing group with operations in 14 countries, headquartered in Athens, Greece, in a dispute with former minority shareholders of Group’s Serbian subsidiary Cementara Kosjerić. (more…)
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Shift in case-law related to appropriation of encumbered real property
Monday, 12 June 2017
[vc_row][vc_column width=”1/2″][vc_column_text]The 2005 Serbian Law on Hypothec (Official Gazette of the Republic of Serbia, No. 60/2005), introduced the possibility of out-of-court collection and in particular the so-called ‘subsequent agreements’, allowing appropriation of encumbered real property instead of satisfaction of secured claim (Article 27 of the Law on Hypothec), but had its flaws that were severely exposed by the case law.
Subsequent agreement is an agreement entered into between the hypothecary creditor and the owner of the encumbered real property, that may provide for the appropriation of encumbered real property by the hypothecary creditor instead of satisfaction of secured claim. Such agreement, reads the law, is allowed once the secured claim matures and should be assembled in the form of an authentic instrument (notarial act) or the authenticated private deed.
However, even though the intent of the legislature was to allow for the swift and effective satisfaction of secured claims, appropriation of encumbered real property, as well as any other form of out-of-court enforcement of hypothec, was made practically inoperative through an inadequate wording of the law itself and subsequent judicial interpretations of such wording.
Prior to the statutory changes of 2015, the lower ranking hypothecs remained existing even after the out-of-court enforcement was carried through. This applied to subsequent agreements, as well. In accordance with the judicial interpretations of both first instance and appellate courts, the lower ranking hypothec remained existing, since subsequent agreement concluded between the creditor whose claim was secured by the prior ranking hypothec and the owner of the encumbered real property were considered to be res inter alios acta, hence incapable to affect adversely the rights of the creditor whose claim was secured by the lower ranking hypothec and who was not a party to such contract.[/vc_column_text][/vc_column][vc_column width=”1/2″][vc_column_text]
This all created a paradox: instead of satisfying claim by the appropriation of encumbered real property, the appropriating creditor whose claim was secured by the prior ranking hypothec got him-self compelled to substitute in the place of the encumbered real property owner.
While the issue was resolved by the statutory changes of 2015, for a significant number of cases that took place before the changes, decision of the Supreme Court of Cassation of Serbia No. Prev. 194/2015 in AIK Banka v. Agrobanka in bankruptcy case, reported here earlier, may provide a breakthrough. In that particular case, the Supreme Court of Cassation held, for the first time, that the rights of lower ranking hypothecary creditors remain reserved only to the extent the value of appropriated real property exceeds the claim secured by the prior ranking hypothec (hypothec of the appropriating creditor). If, on the other hand, the value of appropriated real property falls short of the claim secured by the prior ranking hypothec, or is equal to it, the appropriating creditor should be entitled to request the remaining lower ranking hypothecs to be extinguished and erased.
If you have any questions regarding the above, please contact Živković Samardžić Dispute Resolution Associate Ivan Ljubisavljević (ivan.ljubisavljevic@zslaw.rs), or any of your regular contacts at Živković Samardžić. In preparing this insight, Ivan was assisted by Danica Vlaović, trainee attorney at law.[/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 ranked in all practice areas covered; Marko Trišić recognized as the ‘next generation lawyer’
Monday, 17 April 2017
Živković Samardžić has been among the select few firms ranked in all practice areas covered in Serbia by The Legal 500 Europe 2017, while the directory recognized Marko Trišić, Živković Samardžić Dispute Resolution Senior Associate as the ‘next generation lawyer’. (more…)
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The Supreme Court of Cassation sets an arena for the confrontation between the lawyers and the notaries
Monday, 17 April 2017
[vc_row][vc_column width=”1/2″][vc_column_text]An issue of whether a real estate purchase agreement assembled by the notary as an authentic instrument (notarial act) is a form valid for the inscription of ownership into the real estate cadastre in Serbia, became the matter of dissagreement among the legal professionals after the recent rulling of the Supreme Court of Cassation.
The Civil Department of the Supreme Court of Cassation, at its session held on 25 October 2016, gave the following ruling thereon:
„in case of an authentic instrument, a public notary as a professional enjoing public trust is drawing the legal document, satisfying himself of the identity of the parties, explaining rigorously the implications of the instrument, thus generating higher level of trust comparing to the mere authentication of an agreement. Parties are free, in accordance with the principle of autonomy of will (‘autonomie de la volonté’), to opt, with regards to the form of the contract, for more than a mere minimum of formal requirements. There’s no harm in doing so, neither to the public, nor to the private interests.Form is not a goal in itself. If the formal requirements are interpreted systematically and teleologically, it is clear that an authentic instrument is valid for the inscription of ownership into the real estate cadastre and that a public register (cadastre) may not dismiss or reject the request for inscription solely due to such presumed ‘shortcoming’.”
In other words, the Supreme Court of Cassation held that since additional or more strict formal requirements consume fewer or less strict formal requirements, the contract that in accordance with the law must be concluded in the form of an authenticated private deed, should also be valid if concluded in the form of an authentic instrument.
The form of an authentic instrument as a form required for a real estate purchase agreement was introduced to the Serbian legal system with the 2013 Ammendments to the Law on the Notariate. The ammendments provided that the real estate purchase agreements were to be completely assembled by notaries, thus carving the legal work related to such agreements out of the scope of legal assistance provided by the lawyers – members of the Bar Associaton.
Not so long after the Ammendments to the Law on the Notariate, the members of the Bar went on strike that frozen almost all administration of justice in Serbia and lasted more than four months. The strike was called off only after the government accepted to table the new Ammendments to the Law on the Notariate to the Parliament, that would erese the real estate purchase agreements from the list of agreements for which the form of an authentic instrument was required.[/vc_column_text][/vc_column][vc_column width=”1/2″][vc_single_image image=”5490″ img_size=”full”][vc_column_text]Two years after the compromise that ended the strike, the rulling of the Supreme Court of Cassation may renew the conflict between the licensed legal professions, lawyers and notaries.
The Bar and its memebers are mostly at the position that a real estate purchase agreement assembled by the notary as an authentic instrument is not a valid form for the inscription of ownership into the real estate cadastre. Their arguments are based on the Real Estate Transfer Act, general principles of the State Survey and Cadastre Act, as well as on the fact that erasing the real estate purchase agreements from the list of agreements for which the form of an authentic instrument in the Ammended Law on the Notariate, was a compromise accepted by both lawyers and notaries. The same line of arguments led number of cadastral administrations to their decisions dismissing requests for the inscription of ownership into the real estate cadastre based on the authentic instruments.
On the other hand, the position of the Supreme Court of Cassation, besides its sound theoretical basis, appears to be pragmatic as well. There appaers to be a significant number of the real estate purchase agreements assembled by notaries as authentic instruments, and those who have opted for such form will now be in position to inscribe their ownership into the real estate cadastre.
However, while the ruling of the Supreme Court of Cassation solves an issue of importance for the judiciary and the administration and upholds the legal certainty, it does create a new confrontation arena for the lawyers and the notaries. This is even more the case after the Bar Association of Serbia required the Supreme Court of Cassation to set aside its own ruling, under the threat of another strike.
If you have any questions regarding the above, please contact Živković Samardžić Dispute Resolution Associate Jovan Pjevač (jovan.pjevac@zslaw.rs), or any of your regular contacts at Živković Samardžić. In preparing this insight, Jovan was assisted by Tihomir Vlaović, trainee attorney at law.[/vc_column_text][/vc_column][/vc_row]
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Top-Tier Ranking in Chambers Europe 2017 for Živković Samardžić Dispute Resolution Practice
Monday, 10 April 2017
Živković Samardžić, one of the Serbia’s leading full-service independent law firms has been ranked as a top-tier Serbian Dispute Resolution firm by leading legal directory Chambers and Partners in its 2017 Europe edition. The firm has retained its top-tier Dispute Resolution Chambers ranking for the fourth year running and has also improved its ranking in the Employment practice area.
The directory recognizes Živković Samardžić for its “strong commercial litigation practice” that is “well placed to receive contentious mandates deriving from financial, insolvency and labor issues, in addition to regulatory matters” and “particularly adept at offering experienced advice on international investment treaty arbitration cases and IP litigation.”
Miloš Milošević, Partner, head of Živković Samardžić Dispute Resolution practices and Miloš Živković, of counsel, were ranked individually for their Dispute Resolution work. Chambers Europe 2017 guide quotes clients who have praised Miloš Milošević for being “among the handful of best commercial litigators in the country” and Miloš Živković for his “experience in arbitration.”
Jovana Tomić, Partner and head of Živković Samardžić Employment practices, was also ranked individually for her counsel on sensitive employment cases, her expert command of employment litigation, union negotiations work and counsel provided on redundancies arising from changes in staff structure within companies.
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Different Courts, Different Viewpoints: Article 26 of the Law on Enforcement and Security
Sunday, 26 March 2017
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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.
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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.
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Click here to read this insight in Serbian.
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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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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.
Photo by krik.rs
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