1. What are the different types of (court) procedures in case of a commercial dispute?
There are several possibilities for resolving commercial disputes. The most desirable and economical way is to resolve the dispute through mediation.
Also desirable, but in relation to mediation, a more formal and expensive way is to resolved disputes through arbitration either by permanent or ad hoc arbitration
In the end, the most complex, most expensive, but also the most common way of resolving commercial disputes is by filing a lawsuit with the competent commercial court.
2. What is the working language of the different (court) procedures?
Mediation procedure
The law governing the meditation procedure does not explicitly prescribe the language in which the procedure is conducted. Having in mind the basic principles of this procedure, which are voluntariness and equality, it follows that the parties can agree on the language of the meditation procedure.
Arbitration proceedings
In arbitration proceedings as and in the mediation procedure, the parties may mutually determine the language or languages in which the arbitration proceedings will be conducted, and if there is no such agreement, the arbitral tribunal shall decide, taking into account the place of arbitration and the language used by the parties in their legal relationship.
Permanent arbitral institutions may regulate the issue of language in arbitration proceedings by their rules.
Proceedings before a commercial court
In civil proceedings whose rules also apply to commercial disputes, the Serbian language is in official use, however, the parties and other participants in the proceedings have the right to use their own language at hearings and during oral proceedings before the court.
If the proceedings are conducted in a language that the parties or other participants in the proceedings do not understand, they will be provided, if requested, with interpretation into a language they understand at the hearing, as well as interpretation of documents used at the hearing for proof.
3. When is the relevant body competent to take cognisance of the dispute?
Mediation procedure
The mediation procedure is initiated by concluding an agreement on joining the mediation, and it is applied in disputable relations in which the parties can freely dispose of their requests, unless another law prescribes the exclusive jurisdiction of a court or other body.
Mediation is possible especially in property disputes whose subject is the fulfillment of the obligation to act, other property disputes, among other things in commercial disputes, in which mediation corresponds to the nature of the disputed relations and can help resolve them.
Arbitration proceedings
Arbitration may be contracted to resolve a property dispute over the rights freely available to the parties, except for disputes for which the exclusive jurisdiction of the court is determined.The arbitration agreement must be concluded in writing.
It is considered that there is an agreement on arbitration even if the plaintiff initiates an arbitration dispute in writing, and the defendant explicitly accepts the arbitration and agrees to it in writing or in a statement at the hearing.
The parties may determine the place of arbitration by agreement.
If the parties have not mutually determined the place of arbitration, the place of arbitration shall be determined by the arbitral tribunal, taking into account the circumstances of the case, which include the suitability of the place for the parties.
Proceedings before a commercial court
The Commercial Court judge in disputes between domestic and foreign companies, enterprises, cooperatives and entrepreneurs and their associations (economic entities), in disputes arising between economic entities and other legal entities in performing the activities of economic entities, as well as when in the mentioned disputes one of a natural person if the party is in a material rivalry relationship with the party also in the process of bankruptcy and reorganization of economic entities etc…
The court in whose territory the defendant resides has territorial jurisdiction over the trial. If the law does not prescribe the exclusive territorial jurisdiction of a court, the parties may agree to be tried by a court that does not have territorial jurisdiction, provided that that court actually has jurisdiction.
4. Which law is applicable to the different (court) procedures?
Mediation procedure
The Law on Mediation in Resolving Disputes applies to the mediation procedure itself, while the dispute itself is resolved by applying the applicable substantive law and the norms of private international law.
Arbitration proceedings
The arbitration procedure is regulated by the provision of the Law on Arbitration, when deciding on the dispute itself, the Arbitration Court makes a decision on the application of law (if the parties are business entities from Serbia, then Serbian rights), ie legal rules, contracts and customs.
In an international arbitral award, the arbitral tribunal shall render primary rights or legal rules determined by agreement of the parties.
Proceedings before a commercial court
Commercial disputes are regulated by the Law on Civil Procedure, and especially Chapter 34, which regulates commercial disputes, of course, for everything that is not regulated by this chapter, the rules of the Law on Civil Procedure apply.
The norms of the substantive law of Serbia are applied to resolving the dispute, while respecting the rules of private international law in the case of elements of foreignness.
5. Does the judge have specific knowledge of the market?
Mediation procedure
Taking into account the fact that the parties themselves choose an intermediary, they can agree among themselves that it will be a person who will have special knowledge about the market in which the parties operate. Therefore, this type of procedure may be particularly desirable
Arbitration proceedings
In the arbitration procedure as well as in the mediation procedure, the parties shall appoint an arbitrator by agreement and in that respect they may agree that it shall be a person with special knowledge in the field of the parties.
Proceedings before a commercial court
In the procedure before the commercial courts, judges decide as experts in the field of law, and they usually do not have special knowledge about the areas in which the parties operate.
6. Are the procedures and the rulings confidential?
Mediation procedure
In the mediation process, the public is excluded. All data, proposals and statements from the mediation procedure or in connection with the mediation procedure are confidential, unless the parties have agreed otherwise, except those that must be disclosed by law, in order to protect public order.
Arbitration proceedings
Unlike court proceedings, arbitration proceedings are implicit. The identity of the parties cannot be revealed without their consent, and hearings are held only in the presence of the parties and persons authorized by them. The decision may be published in full only with the consent of the parties who in this procedure keep confidential business information that they disclose during the dispute.
Proceedings before a commercial court
As opposed to mediation and arbitration in which the exclusion of the public is the rule in court proceedings, the rule is that trials are public, with the possibility for the court to exclude the public.
When announcing the verdict, the court will read the verdict publicly and, if possible, briefly state the reasons for the verdict, but if the public was excluded at the main hearing, the verdict will always be read publicly, and the court will decide whether the public will excluded when publishing the reasons for the judgment.
7. What are the costs of the different (court) procedures?
Mediation procedure
In the mediation process, the costs depend on the value of the dispute and they can range from 100 euros to 1,500 euros
Arbitration proceedings
The costs of the arbitration proceedings are undoubtedly much lower than the costs of the court proceedings, but bearing in mind that
Proceedings before a commercial court
Proceedings before commercial courts are the most expensive type of proceedings through which a party can exercise his right. The amount of the costs of the procedure itself depends entirely on the value of the subject matter of the dispute.
8. Can the losing party be ordered to pay the costs of the proceedings?
Mediation procedure
In the mediation procedure, the rule is each party bears its own costs, and the common costs are borne in equal parts, unless they differ differently. Therefore, if the parties so agree, it is possible that the party that loses the dispute bears the costs of the same.
Arbitration proceedings
In the arbitration procedure, the parties bear the costs in proportion to the success of the dispute, so that the party that loses the dispute in its entirety will be obliged to reimburse them.
Proceedings before a commercial court
In the procedure before the commercial court, the rule is that the party bears the costs in proportion to the success of the dispute, so that the party that loses the dispute also bears the costs of the procedure.
9. What is the average lead time of the different (court) proceedings?
Mediation procedure
As a rule, the mediation procedure lasts for a maximum of 2 months from the moment when the parties initiate this type of procedure.
Arbitration proceedings
The procedure before the arbitration lasts for a maximum of 6 months from the moment of the constitution of the arbitration panel or the election of the individual arbitrator.
Proceedings before a commercial court
As a rule, proceedings before commercial courts are characterized by an average duration of between two and three years.
10. Is the judgment consigned in other EU member states and can it be enforced there? And outside the EU?
Mediation procedure
If a Member State, in accordance with its rules, guarantees the possibility for the parties or one of them, with the express consent of the other party, for a written agreement reached through mediation in a cross-border dispute to become enforceable, such an agreement may be enforced.
Arbitration proceedings
Enforcement of arbitral awards abroad has been greatly facilitated thanks to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, to which Serbia is a party, together with 150 countries. Thanks to that, the arbitral award made before the arbitration can be enforced in more than 150 countries around the world.
Proceedings before a commercial court
A foreign court decision is equated with the decision of the court of the Republic of Serbia and produces legal effect in the Republic of Serbia only if it is recognized by the court of the Republic of Serbia. Reciprocity is required as a basic condition for the recognition of a foreign court decision.