Playing with fire and other games

On March 17, the Public Information Service of the Government of Montenegro issued a statement with a somewhat pompous title – “Interstate Agreement with the UAE in Accordance with the Constitution”. The statement stated that the failure of the Constitutional Court to issue a decision had provided “institutional confirmation that the Montenegrin Government has protected its interests with this document and that it has not guaranteed a privileged position to any country or individual”. The Constitutional Court immediately issued a denial, stating that it had not issued a decision on either constitutionality or unconstitutionality.

By not making a decision, no institutional confirmation was received, because the Constitutional Court did not make a decision that the Constitution was not violated. All we could read was that three judges had one interpretation, and three had another. In sports jargon, "unresolved". That is, not resolved. Contrary to what the Information Service says in its statement.

When it comes to the (un)constitutionality of the Agreement with the UAE, two things need to be separated. One relates to the text of the agreement itself, and the other to the (un)constitutionality of the Law on Ratification of the Agreement with the UAE, because it is not the same thing.

For the first question, it is clear from the text itself that the Agreement is contrary to the Constitution of Montenegro. Article 140(3) of the Constitution states: "Distortion and restriction of free competition and encouragement of an unequal, monopolistic or dominant position on the market are prohibited."

Article 3(1) of the Agreement with the UAE states that Montenegro “shall undertake all necessary measures and activities to secure the land necessary for the implementation of the Projects... without the need to conduct public procurement, public tender or other procedures prescribed by national legislation governing the area of ​​state property".

The repeal of the provisions of the Montenegrin regulations on public procurement and public tenders represents the repeal of the fundamental principles on which free competition is based. According to Montenegrin regulations, for projects such as the construction of a ski resort and a tourist complex, it is necessary to implement a public procurement and tender procedure, or public bidding (the sale or lease of state-owned land by direct negotiation without a public bidding would be contrary to Article 40 of the Law on State Property, the application of which is derogated from by the agreement with the UAE). That the repeal of the application of the Montenegrin regulations relating to freedom of competition violated Article 140(3) of the Constitution of Montenegro is so clear that there is no need for interpretation. "What everyone understands equally, does not need an interpreter".

The second issue regarding the (un)constitutionality of the Law on Ratification of the Agreement with the UAE is more complex. Namely, Article 9 of the Constitution stipulates that international treaties "shall have primacy over domestic legislation."

According to the Constitutional Court, in the procedure for assessing the compliance of a law with the Constitution, the Constitutional Court can assess the formal constitutionality of the law on ratification of an international treaty, i.e. the procedure for its adoption, and not the constitutionality of the material content of the treaty. The task of the Constitutional Court is, therefore, to examine the formal constitutionality of the Law on Ratification of the Agreement with the UAE, i.e. the procedure for its adoption, and cannot assess the constitutionality of the international treaty itself. Of course, the Constitutional Court has the jurisdiction to examine the constitutionality of laws. The fact that a specific law confirms an international treaty is completely irrelevant. The constitutionality of the international treaty is not assessed, but of the law adopted by the Parliament.

The Constitution should take precedence over international treaties. It is the legal foundation of the state, the highest legal act of the state regulating the political, social and economic order, and is adopted by the Parliament with a two-thirds majority. The agreement with the UAE is the result of negotiations between representatives of the executive branch, ratified by a simple majority in the Parliament. The construction of a tourist complex cannot be more important than the fundamental values ​​protected by the Constitution. As things stand now - the situation is reversed

In this specific case, the task of the Constitutional Court is not to assess the constitutionality of the content of the agreement with the UAE, although the content of the agreement is contrary to the Constitution, so that issue could also be raised. Article 9 of the Constitution is not sufficiently clear, in the sense that it does not specify whether international treaties have primacy over the Constitution. True, the concept of domestic legislation in a broader sense includes the Constitution, but the question of the justification of the position that international treaties have primacy over the Constitution could be raised. The Constitution is incomplete, in the sense that it does not create a clear hierarchy, especially between the Constitution and international treaties. Articles 145 and 149 indicate the need for laws to be harmonized with the Constitution and international treaties, from which it can be concluded that the Constitution and international treaties are on the same level, but the Constitution should have taken another step to clearly state which act has primacy, the Constitution or international treaties.

From the perspective of elementary logic, the Constitution should take precedence over international treaties. The Constitution of Montenegro is the legal foundation of the state, the highest legal act of the state regulating the political, social and economic order, and is adopted by the Parliament by a two-thirds majority of all deputies. On the other hand, the Agreement with the UAE is the fruit of negotiations between representatives of the executive branch, ratified by a simple majority in the Parliament. In terms of importance for the interests of Montenegro, the Constitution far surpasses the Agreement with the UAE. Common sense says that the construction of a ski resort and a tourist complex cannot be more important than the fundamental values ​​protected by the Constitution. As things stand now, the situation is reversed. Considering the current situation, I believe that it would make sense to open a debate on this topic. The Constitutional Court should be a bulwark that protects the Constitution from attacks, including attempts to derogate the application of the fundamental principles of the Constitution by international treaties. That is another topic, but it is also very much related to this topic.

The focus of the debate on the constitutionality of the Law on the Acceptance of the Agreement with the UAE is Article 91, paragraph 3 of the Constitution, which stipulates that the Parliament shall decide by a two-thirds majority of all deputies on laws regulating the property rights of foreigners. The agreement with the UAE states the obligation of Montenegro to provide investors from the UAE with land for the implementation of projects. Based on this, it can be concluded that the projects that should be implemented by investors from the UAE would be based on lease, or on the right of ownership, with possible expropriation of land, in order to transfer property rights to that land to the investors. It is quite clear that the agreement refers to the property rights of foreigners. Therefore, it can be concluded that the Law on the Confirmation of the Agreement with the UAE on the Basis of Which Foreigners Acquire Property Rights, from the aspect of the adoption procedure, is contrary to the Constitution of Montenegro, since it was voted in the Parliament of Montenegro by a simple majority, and not by a qualified majority, as the Constitution requires.

The Government of Montenegro believes that Article 91, paragraph 1 of the Constitution, and not Article 91, paragraph 3, should be applied to the formal constitutionality of the law on the recognition of the Agreement with the UAE.

Article 91, paragraph 1, reads:

"The Assembly shall decide by a majority vote of the deputies present at a session attended by more than half of all deputies, unless otherwise provided by the Constitution".

Article 91, paragraph 3, reads:

"The Assembly decides by a two-thirds majority of all deputies on laws regulating the electoral system and property rights of foreigners".

Article 91 paragraph 1 contains a general provision that applies "unless otherwise provided by the Constitution". Article 91, paragraph 3, contains a special provision relating to the property rights of foreigners. This is the situation referred to in paragraph 1, "ako The Constitution does not provide otherwise.". The Law on the Confirmation of the Agreement with the UAE refers to the property rights of foreigners, i.e. it fits into the application of Article 91, paragraph 3. Even without that explicit note, the principle in law is clear: specific provisions take precedence over general (lex specialis derogat general laws). Therefore, the interpretation of the Government of Montenegro is wrong.

Referring to the previous practice of the Constitutional Court cannot change this. At the hearing organized by the Constitutional Court in December 2025, Minister Adžović cited parts of the Constitutional Court's decision on the constitutionality of the Law on Ratification of the North Atlantic Treaty, which made Montenegro a member of NATO. This Law was challenged on a similar basis, namely that a two-thirds majority was required for valid acceptance, since it was an agreement regulating the issue of the use of the Montenegrin Army outside the borders of Montenegro, for which a two-thirds majority is required under Article 91, paragraph 4. The Constitutional Court did not accept this argument, since the provision of Article 91, paragraph 4 refers to "the required majority in the procedure for adopting laws on these issues, and not to the required majority for adopting laws ratifying an international treaty." Based on this argument, and the position that "the Constitution does not specifically (differently) prescribe a majority of votes of deputies for the adoption of a law on the ratification of an international treaty", the Constitutional Court determined that for the assessment of the formal constitutionality of the contested Law, "the provision of Article 91, paragraph 1 of the Constitution is directly relevant". Therefore, the position of the Constitutional Court was that a two-thirds majority was required for the adoption of a special law on the use of the Army of Montenegro outside the borders of Montenegro, and not for the adoption of the law itself ratifying an international treaty, and since the Constitution does not otherwise prescribe a majority of votes, the Constitutional Court applied Article 91, paragraph 1.

The Constitutional Court acted correctly in the part relating to the adoption of a special law on the use of the army. It should only have applied Article 91, paragraph 2, which stipulates that the Parliament shall adopt laws regulating defense and security by a majority vote of all deputies, since the Law on Ratification of the North Atlantic Treaty relates to defense and security issues. The outcome would have been the same, given that 46 out of a total of 81 deputies voted in favor of that law. The difference compared to the agreement with the UAE is that that agreement relates to the property rights of foreigners and there is no need to adopt a special law, unlike the situation with the North Atlantic Treaty. Instead of adopting a new law, the implementation of the agreement with the UAE would likely be carried out through a public-private partnership between Montenegro and investors from the UAE, and possibly through a lease agreement directly between investors from the UAE and land owners from Montenegro. Therefore, this is a completely different relationship, which would be regulated by a contract, and not by a special law that would require a two-thirds majority in the Parliament. In the case of the North Atlantic Treaty, parliamentary control continues through a special approval for the use of the Montenegrin Army outside the borders of Montenegro (at least that's how it should be), while in the case of the agreement with the UAE, parliamentary control is exhausted by voting on the agreement. It's not the same.

Even if this argumentation on the distinction between the two laws above is debatable, and the nature of law is such that counter-arguments can always be found, this does not mean that the Constitutional Court cannot deviate from the position it has once taken. Previous decisions do not have binding force, but can be used as only one of the arguments in making new decisions. Even in Anglo-Saxon law, which is based on the binding nature of precedents, courts can deviate from previous decisions, often by “distinguishing” them (distinguish) from previous precedents. Thus, it would be possible to distinguish between rules relating to dogs and cats, but it would be difficult to distinguish between white and black cats. On the other hand, it is very easy to distinguish between rules relating to defense and security and rules relating to the property rights of foreigners.

A particular problem with the Agreement with the UAE is that it excludes the application of domestic laws on public procurement and tenders and other procedures prescribed by Montenegrin legislation governing the area of ​​state property.

The importance of consistency of case law as one of the foundations of legal certainty is not in dispute. But is consistency really more important than correctness of case law? If the Constitutional Court has made a mistake in a previous case, and no court is infallible (except for God's court, which Christianity teaches is just and infallible), this does not mean that it should constantly repeat that mistake for the sake of "consistency". Can the consistency of something that is wrong be right?

A particular problem with the Agreement with the UAE is that it excludes the application of domestic laws on public procurement and tenders and other procedures prescribed by Montenegrin legislation governing the area of ​​state property. In principle, public procurement and tender procedures lead to the most advantageous offer, both financially and technically, while direct agreements lose these advantages, so it is unclear why the government is depriving itself of something that is essential for the economic interests of Montenegro. “Vijesti” recently published an informative article on the importance of public procurement and tenders Text Dejan Mijović's "Shortcuts More Important than Europe", to which there is nothing to add.

The main role of public tenders is to ensure market competition through transparent procedures, which allows the state to obtain the best value, putting pressure on bidders to offer better quality at lower prices. In addition, public tenders are a key instrument in preventing corruption. Public availability of documents makes it difficult to create secret agreements between the state and a privileged company, thus ensuring control of the process, while clearly defined criteria for evaluating bids reduce the possibility of discretionary decision-making by the competent ministry. Tenders are not devoid of possible abuses either, because tenders can also be rigged, if the technical conditions are "drawn" for a pre-selected bidder (the so-called "bid-rigging"). However, tenders are a globally accepted method that represents the basis of market competition, which should be of particular importance in deals of strategic importance, such as the one planned with the UAE. Montenegro is not in a position to invent hot water.

Even if the Constitution is not violated, the agreement with the UAE is problematic in many ways from the perspective of Montenegro's interests. Montenegro assumes numerous obligations, while the UAE has practically no obligations and responsibilities. The method of selecting the investor is also problematic. Namely, the investor is proposed by the UAE, and Montenegro only gives its consent, whatever that means. How can Montenegro know whether the best investor has been proposed, if the tender procedure is suspended? True, Article 2, paragraph 1, stipulates that the UAE guarantees investors from that country, from which it can be concluded that the UAE would have some obligations towards Montenegro, if the investors did not fulfill their obligations. However, paragraph 5 of the same article states that the UAE "shall not be subject to any dispute resolution mechanisms". What kind of guarantee is that, if there is no responsibility? When building a ski resort, the question of the capacity of investors from the UAE can also be raised, given that the UAE is not a country known for its ski resorts. If a public tender for the construction of a ski resort were to be announced, companies with experience and knowledge in that business, for example from Austria or Slovenia, would probably apply. Above all, Montenegro undertakes the obligation to build the infrastructure necessary for the implementation of the project (Article 3, paragraph 1, point c), which could significantly burden the budget of Montenegro.

The method of selecting the investor is also problematic – the UAE proposes it, and Montenegro only gives its consent, whatever that means. How can Montenegro know whether the best investor has been proposed, if the tender procedure is suspended?

The aforementioned press release from the Information Service claims that the Government of Montenegro “has not guaranteed a privileged position to any country or individual”. Should this be understood as meaning that the Government will also refrain from applying Montenegrin regulations on public procurement and tenders in the future? Because, if someone is exempted from the obligation to comply with these regulations, and the Government announces that this is not a “privileged position”, then this means that these Montenegrin regulations do not apply to other “countries and individuals”.

Even if this were not the intention of the Government, based on the most-favoured-nation clause, companies from Austria, Switzerland, or Serbia would have the right to demand equal rights of exemption from the application of public procurement and tender regulations, as contained in the Agreement with the UAE, since Montenegro's international agreements with these countries contain a most-favoured-nation clause. This means that if Montenegro has granted rights to one country, it must guarantee the same rights to another with which it has bilateral agreements with that clause. Thus, a domestic company, say from Žabljak or Rožaje, could establish a company in one of these countries, say Austria. After that, it could appear as an Austrian company in Montenegro, and request that public procurement and tender regulations, as well as procedures prescribed by the Law on State Property, not apply to its project to build a ski resort in Montenegro. There is a rich arbitration practice that accepts this type of manipulation of a company's nationality. When I asked one of the arbitrators of the ICSID arbitration, which specializes in arbitration disputes, about this practice at a conference in Washington dedicated to investment arbitration, he just smiled and replied: “And why don’t states protect themselves?” No matter how cynical it may sound, from the perspective of ICSID arbitration, that is exactly how things are. States can protect themselves from such abuses by means of a special clause in bilateral agreements that can prevent such abuses (“denial of benefit"clause), which denies protection to "paper" companies. None of Montenegro's bilateral agreements contain this protective clause. Montenegro thus offers itself "at your own risk".

The government has made a serious mistake by derogating from the application of Montenegrin regulations on public procurement and tenders, which could lead to serious problems. For example, if companies from countries with which Montenegro has bilateral agreements, which contain the most-favored-nation clause, appear with a request to derogate from the application of public procurement and tender regulations, as well as the procedures prescribed by the Law on State Property. It is not difficult to imagine schemes of possible abuse (and Montenegrins are masters of enviable creativity in this). Such a derogation from Montenegrin regulations could lead Montenegro into arbitration disputes and significant costs.

Montenegrin regulations should apply to everyone equally. If they apply to some and not to others, then that is a privileged position. Privileges cannot be given to some and not to others, so it is claimed that there are no privileged ones. How can it not be when investors from the UAE are exempt from regulations on public procurement and tenders for projects that have been declared of strategic importance, while tenders are carried out for much smaller projects? For example, for plateau landscaping in front of an elementary school. It turns out that Montenegro is paying more attention to the landscaping of a plateau in front of an elementary school than to projects planned in the most attractive locations in Montenegro.

The logical question that arises is why is this being done? If someone is given great financial and other benefits, what does he get in return?

Why is Montenegro abandoning its own laws regulating public procurement and tenders? We have not heard the reasons so far. In addition to other benefits brought by free competition, the public procurement and tender procedure reduces the risk of possible abuses and corruption through the transparency of the procedure. The exclusion of regulations and procedures relating to state property opens up the risk of corruption at the highest level, since decisions are made outside the legally prescribed procedures and public scrutiny. There are many questions that raise suspicion.

The government has made a serious mistake by derogating from the application of Montenegrin regulations on public procurement and tenders, which could lead to serious problems.

Instead of answering the question of why it concludes international agreements that repeal Montenegrin regulations and violate the Constitution, the Government of Montenegro diverts attention from this key problem by referring to the fact that the Constitutional Court cannot assess the constitutionality of international agreements, because international agreements have primacy over the Constitution. In its address to the Constitutional Court, it refers to the fact that "Montenegro has undertaken the obligation to consistently respect the rule of law and legal certainty". What rule of law and legal certainty are we talking about, if the Government of Montenegro derogates from the application of its own state's regulations, which should be a guarantee of free competition and transparency, and then violates the Constitution?

A special question that can be raised is the way in which such important issues are decided. The government has found an efficient way to push whatever it wants through the voting machine of the Parliament of Montenegro. In this way, the system of parliamentary control collapses, while the voting of decisions that violate the provisions of the Constitution represents an attack on the Constitution, as the fundamental legal act of Montenegro.

If the Constitutional Court votes on the constitutionality of the Law on Ratification of the Agreement with the UAE, it would create a dangerous precedent that would allow amendments to the Constitution by voting by a simple majority on international treaties that would contain provisions contrary to the Constitution. Thanks to the majority in the Parliament, the Government can ensure that an international treaty that would be contrary to the Constitution is accepted, because the Constitutional Court has taken the position that it cannot decide on the constitutionality of international treaties. The consequences for Montenegro in that case could be disastrous. This could open a shortcut, or more precisely, a bypass, through which provisions of the Constitution could be changed. For example, on citizenship. This is playing with fire. Opening up the possibility of amending the Constitution through international treaties leads to the collapse of the Constitution. It is incredible that the Government of Montenegro is the main promoter of the collapse of the Constitution, with the assistance of the parliamentary majority in the Parliament of Montenegro. Even if the Constitutional Court accepts that something that is obviously unconstitutional is constitutional. So let's turn off the lights.

The author is a professor emeritus of the Faculty of Law of Kyushu University