Arbitration

UNCITRAL Model Law

Is the arbitration law based on the UNCITRAL Model Law?

The Serbian Law on Arbitration is based on the UNCITRAL Model Law on International Commercial Arbitration. Furthermore, Serbia is a party to the New York Convention on Recognition and Enforcement of Arbitral Awards.

Arbitration agreements

What are the formal requirements for an enforceable arbitration agreement?

For arbitration agreements to be enforceable, they must be in writing. An arbitration agreement is in writing if it is concluded by an exchange of messages that enable written evidence of the agreement of the parties, regardless of whether those messages have been signed by the parties. An arbitration agreement can be a separate agreement, part of a written commercial agreement, part of some other agreement or part of the terms and conditions of one party to which the agreement in writing refers.

Except when an arbitration agreement is not in writing, it is deemed null and void if a dispute is not arbitrable; the contracting parties did not have the capacity or ability to conclude it; it is concluded under the influence of coercion, threats, fraud or misrepresentation; or if the parties chose an even number of arbitrators.

Choice of arbitrator

If the arbitration agreement and any relevant rules are silent on the matter, how many arbitrators will be appointed and how will they be appointed? Are there restrictions on the right to challenge the appointment of an arbitrator?

If the arbitration agreement and relevant rules are silent on the number of arbitrators, their number will be determined by the chosen appointment authority (a person or institution designated by the parties). If the parties have not chosen that appointment authority, the number will be determined by the court. If the permanent arbitral institution organises arbitration, that institution will be the appointing authority.

If the case is to be decided by a sole arbitrator, the appointment of that arbitrator will be agreed by the parties. If the parties fail to reach an agreement on the appointment in 30 days, the arbitrator will be appointed by the person or institution to which the parties entrusted this task. Finally, if the parties are silent on that matter, the arbitrator will be appointed by the court.

If the case is to be decided by a panel of three arbitrators, then each party appoints one arbitrator, and if the party does not appoint an arbitrator, the appointing authority will appoint the arbitrator. If the parties are silent on this matter, the arbitrator will be appointed by the court. The president of the tribunal is appointed by the already appointed arbitrators, or if they do not reach an agreement, by the person or institution to which the parties entrust this task. If the parties are silent on this matter also, the arbitrator will be appointed by the court. An appeal against the decision of the court to appoint an arbitrator is not allowed.

An arbitrator may only be challenged if there are facts that can justifiably raise concerns about the arbitrator’s impartiality or independence, or that he or she does not meet the criteria established by the parties’ agreement. The parties can challenge the appointment up to 15 days from the day they were notified about the appointment or from the day that they become aware of the reasons on which they base the challenge.

Arbitrator options

What are the options when choosing an arbitrator or arbitrators?

An arbitrator may be any person with legal capacity, irrespective of nationality or profession. The arbitrator must be impartial and independent from the parties. Before accepting the appointment, he or she must declare all the facts that might raise doubts about his or her impartiality and independence. The potential arbitrator cannot be appointed if he or she is sentenced to unconditional imprisonment, while the consequences of conviction last.

None of the two currently active permanent commercial arbitration institutions in our jurisdiction (Belgrade Arbitration Center and Permanent Arbitration at the Chamber of Commerce and Industry of Serbia) have a pool of arbitrators. Although the Permanent Arbitration at the Chamber of Commerce and Industry of Serbia has no roster of arbitrators, to assist the parties with the choice of arbitrators, the Permanent Arbitration at the Chamber of Commerce and Industry of Serbia prepares a list of persons qualified for dispute resolution who may be appointed as arbitrators by the parties.

Arbitral procedure

Does the domestic law contain substantive requirements for the procedure to be followed?

The parties are free to choose rules for regulating their dispute or to point to the rules of some permanent arbitration institution. If the arbitration is international, the parties may agree to apply foreign law to the arbitration proceedings. If the parties are silent on this matter, the arbitrators will apply rules that they find appropriate. The parties are equal in the proceedings and the arbitration court has a duty to enable each party to present its arguments and evidence, as well as to present its arguments in relation to the acts of the other party.

Court intervention

On what grounds can the court intervene during an arbitration?

Except where the court intervenes to determine of the number of arbitrators and arbitrator appointments, the court can decide upon a request for interim relief, whether the seat of arbitration is in Serbia or another country. The court can also assist in the presentation of evidence. That evidence has equal power as any other presented before the arbitrator or abitrators.

If the arbitral tribunal decides on the objections to its jurisdiction and scope of the agreement, as a preliminary question either party may request the court designated by law to decide on this matter, within 30 days from the date of receipt of the decision. No appeal shall be allowed against this decision of the court.

If the parties mutually agree, ad hoc arbitration or a permanent arbitration institution may deposit the final award at the court, for the court to deliver the award to the parties.

Save for challenging the jurisdiction of the tribunal, the court’s powers can be overridden by an agreement, as the court can only have a role if the parties have not used their right or are silent on that matter, as well as when the arbitrators need assistance.

Interim relief

Do arbitrators have powers to grant interim relief?

Unless the parties explicitly provide differently, the arbitrator or tribunal has powers to grant interim relief before or during the arbitration. The arbitrators may grant any type of interim relief they find suitable, taking into consideration the type of dispute. The arbitrators may condition their decision on interim relief, subjecting another party to provide reasonable securitisation.

Award

When and in what form must the award be delivered?

The arbitrators decide on the case in the form of a written final arbitral award. The arbitral tribunal may make separate awards on different issues at different times (partial award) or on cross-claims (interim award). An arbitral award is issued after the deliberation of all the arbitrators, unless the parties have agreed otherwise. A majority of arbitrators have to vote for the award, unless the parties have agreed otherwise.

According to the rules of two permanent arbitration institutions in our jurisdiction, arbitrators have six months from the date of constitution of the arbitral tribunal to solve the dispute. However, this period can be prolonged at the request of the parties, tribunal or presidency of the BAC or Permanent Arbitration at the Chamber of Commerce and Industry of Serbia. The rules of the Permanent Arbitration at the Chamber of Commerce and Industry of Serbia stipulate that the final award shall be made within 30 days of the last non-public hearing of the arbitration tribunal.

Appeal

On what grounds can an award be appealed to the court?

The final (domestic) arbitral award has the effect of a final and binding decision and it cannot be appealed.

In ad hoc arbitrations, the parties are able to agree to an arbitral appeal mechanism that should postpone the final and binding effect of the award.

Enforcement

What procedures exist for enforcement of foreign and domestic awards?

Domestic final awards have the legal effect of a final and binding judgment issued by the court, while foreign arbitral awards have that effect once they are recognised. The Serbian Law on Arbitration contains exactly the same rules as those in the New York Convention. Domestic awards are enforced equally as any court’s judgement. Control of domestic awards is possible through the process of annulment of an arbitral award.

A foreign arbitral award must be recognised before enforcement. There is a right to appeal the first instance decision within 30 days from its receipt. Once the award is recognised, it has domestic final and binding effect.

This procedure has not been affected by changes in the political landscape.

Costs

Can a successful party recover its costs?

The parties are obliged to pay for the costs of arbitration in advance. A decision on costs is a mandatory element of the final award. The law does not contain provisions on when and if a party can recover the costs of arbitration. Usually, the tribunal would apply the ‘loser pays’ principle.

The Law on Arbitration does not regulate third-party funding, nor has a Serbian court yet decided on the matter.

Law stated date

Correct on

Give the date on which the above content is accurate.

20 May 2020