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Ćirović: The Protector of Property and Legal Interests was not involved in monitoring the Sveti Stefan arbitration proceedings

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The Protector of Property and Legal Interests was not involved in monitoring the “Sveti Stefan” arbitration proceedings. This was stated by the Protector of Property and Legal Interests Bojana Ćirović in her response to a request from the Cabinet of the President of Montenegro Jakov Milatović for a legal analysis and assessment regarding the conclusion of the settlement in the “Sveti Stefan” arbitration proceedings.

Ćirović stated in her response that the arbitration proceedings, upon the request and lawsuit of Adriatic Properties DOO, Aidway Investment Limited and Amanresorts Management BV, were initiated before the Court of Arbitration in London in 2021.

She reminded that the Government of Montenegro concluded a representation agreement with the international law firm McDermott Law Offices, PLLC, and counterclaims were also raised in that proceeding.

"The Ombudsman was not involved by the relevant ministry or the Government of Montenegro in monitoring this arbitration procedure," said Ćirović.

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She emphasized that the Protector represented the interests of the state in the proceedings conducted before the Commercial Court, and pursuant to the motion for a provisional measure by which the applicant Adriatic Properties requested that the state of Montenegro and HG Budvanska rivijera AD Budva be prohibited from taking actions that could cause harm to the applicant.

These actions, as added in the response, relate to changing the current regime of use of the property, removing installed fences, installations, equipment and elements that serve to protect privacy and exclusivity for guests of the Sveti Stefan and Miločer hotels.

It is alleged that the applicant requested a prohibition on taking actions that incite and encourage third parties to take acts of violence and vandalism against property owned by the applicant and a prohibition on making changes to the property that is the subject of the Lease Agreement.

"Namely, in that proceeding, after the acting judge Blažo Jovanić twice adopted the proposed interim measure, issuing a decision immediately before the arbitration hearing, the Protector succeeded in the proceeding and ultimately such a measure was rejected by the Commercial Court of Montenegro, which was confirmed by the panel of that same court," the response states.

Ćirović stated that the Protector participated, by force of law as a legal representative, in the proceedings initiated before the Commercial Court for the recognition of foreign court decisions - Partial judgments rendered in this Arbitration proceeding.

"In these proceedings, the Protector expressed his personal position arising from the mandatory regulations of Montenegrin legislation and the Law on Private International Law, pursuant to which the domestic court has exclusive jurisdiction over this procedure," said Ćirović.

She emphasized that the Protector was never involved in monitoring this arbitration proceeding, as is the case in all other arbitration proceedings conducted against the State of Montenegro.

"According to the information available to the Protector, the Government of Montenegro did not conclude a settlement in the arbitration proceedings, but rather proposed to the Parliament of Montenegro the conclusion of an Annex to the Lease Agreement, which agreement has been in force all this time, i.e. has not been terminated, nor was it a request from any party in the arbitration proceedings," the response states.

It is emphasized that the Government of Montenegro, as an executive body that makes decisions, may or may not consult the Protector when making decisions, while in this specific case the Protector did not provide an Opinion in accordance with Article 56 of the Law on State Property.

"The Protector was consulted verbally regarding the possibility of concluding the Annex to the contract in question, not regarding deciding on the terms thereof," the response added.

Ćirović said that answers to the questions from the President's Cabinet can only be provided by the Government of Montenegro, the Ministry of Economic Development, the Ministry of Spatial Planning, Urbanism and State Property, and possibly the Investment Agency of Montenegro.

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