We are ready to come to terms with Montenegro, that is, with the Government of Milojko Spajić, especially since we have projects that are blocked, and both the state and the Atlas Group lose out, he said. Dusko Knezevic via the Atlas Group Legal Team. The Government of Montenegro did not respond to questions regarding the arbitration proceedings being conducted before the Permanent Court of Arbitration in The Hague.
This businessman also offered a settlement to the Government of Duško Marković, but his offer, as was announced at the time, was ignored.
Knežević, who has been in the Spuž Remand Prison since his extradition from the United Kingdom on April 30 last year, filed a request for arbitration on December 1, 2020, initiating arbitration proceedings before the Permanent Court of Arbitration in The Hague against the Government of the Republic of Montenegro. A claim for damages of EUR 500 million was also filed, the amount estimated to have been suffered by Atlas Capital Holding Limited, Meljine Complex Limited and the president of the Atlas Group.
Since the two parties failed to reach an agreement on the election of the President of the Arbitral Tribunal, the Permanent Court of Arbitration in The Hague appointed Professor Donald McRae as president at his discretion, which was the last step before the start of the hearing before the arbitral tribunal.
On April 23 last year, the Atlas Group's legal team informed the public that the arbitration proceedings, which Knežević, Atlas Capital Holding Limited and Meljine Complex Limited initiated against the Government of the Republic of Montenegro, were to officially begin in a month. After a year, however, neither Duško Knežević nor the Government of Montenegro have made any announcements regarding the arbitration, and there is no new information on the official portal of the Permanent Court of Arbitration (PCA) in The Hague.
No public during the proceedings
"Formally, the legal team from London representing the interests of Duško Knežević and the Atlas Group in the arbitration proceedings against Montenegro is not allowed to issue public statements while the arbitration proceedings are ongoing," the Atlas Group Legal Team told Vijesti.
"We can only say that our lawyers requested a stay of the arbitration proceedings while I am in custody," Duško Knežević told Vijesti from the detention center in Spuž through the lawyers representing him in court proceedings at the Higher Court in Podgorica.
"However, we are of the opinion that the Prosecutor's Office and the High Court are deliberately keeping me in detention, violating my fundamental human rights guaranteed by the European Convention on Human Rights and Freedoms, even though Montenegrin lawyers in London said that I would have the same treatment as I had during my stay in London. This included a 75.000 pound security deposit and house arrest with freedom of movement around the country. I spent a total of two and a half years there with a nail gun plus two years each with mandatory reporting to the police," is Duško Knežević's message.
The government of Milojko Spajić, on the other hand, namely the Ministry of Finance, formed an interdepartmental Working Group with the aim of more efficient monitoring and creating better conditions for the successful completion of the arbitration proceedings.
Protector of the State's Property and Legal Interests Bojana Cirovic, a member of the Working Group, recalls that this arbitration applies the UNCITRAL rules, according to which the arbitration proceedings are confidential.
"As a member of the Working Group, I am familiar with the course and current status of the arbitration and of course I follow the proceedings, given that communication is constant. The Protector of Property and Legal Interests has provided the legal team with documentation relevant to the arbitration in question, with all necessary explanations and clarifications," Ćirović told Vijesti.
When asked whether there were any talks between the two parties, the Protector said that she was not aware of any actions being taken other than those in the arbitration proceedings themselves.
Confidentiality is a requirement of arbitration
Attorney Vojin Biljic, an expert in international arbitration, says that it seems to him that the parties in the arbitration proceedings are cautious about communicating and disclosing details of the proceedings to the public because confidentiality is a requirement of the arbitration itself, and probably a preliminary agreement between the parties and the arbitrators within this specific proceeding.
"This could also explain the fact that there is no information about the proceedings even on the official presentations of the arbitration court itself. In such serious disputes, something like this is not uncommon, since the line between communication with the public that would be acceptable and would not violate the integrity of the proceedings and that which could not be considered acceptable is quite filigree, so it is in the interest of both parties and the arbitration panel itself to avoid this type of challenge," explains Biljić, noting that it is possible that the proceedings are already somewhere in the final phase.
He points out that there is a theoretical possibility that the parties to the arbitration decided to start negotiations during the proceedings and that there is a certain delay in the proceedings in this regard. Of course, Biljić adds, something like that would be particularly confidential given that one party to the proceedings is a state and that there is therefore greater public interest, so disclosing information about the course of the negotiations could jeopardize the outcome.
"This is one of the cases where the public interest justifies the lack of transparency and where the state can restrict freedom of expression in terms of the right to receive information. On the other hand, in the event of the success of such negotiations and an eventual settlement between the parties to the proceedings, it is likely that the public would be informed very quickly about the outcome of the negotiations," said attorney Vojin Biljić.
Lengthy proceedings in investment arbitrations
Nina Janković, a lawyer at Aceris Law, a leading international arbitration law firm, points out that it is important to clarify, despite previous statements by the legal team, that the available information – including the announcement on the Jus Mundi platform, indicates that this is an ad hoc arbitration, most likely under the UNCITRAL rules, and not an arbitration administered by the Permanent Court of Arbitration in The Hague (PCA).
"This explains why there is no public information about the proceedings on the PCA website. Under UNCITRAL rules, the PCA has another function, which is the "appointing authority", so it is possible that the PCA would only be involved in the process of constituting the tribunal. In ad hoc arbitrations, which are not administered by an institution such as the PCA, the responsibility for initiating and organizing the proceedings lies solely with the parties themselves," explains Janković.
It is possible, the lawyer adds, that negotiations on an out-of-court settlement are being conducted in parallel, which could be an additional reason for delaying the formal start.
"It is possible for the parties to conduct settlement negotiations in parallel. This is especially likely in cases where the political will to resolve the dispute has been expressed," points out Nina Janković.
If the procedure has not yet officially begun, despite earlier announcements, according to her, there are generally several possible reasons.
“Such delays are not uncommon. Arbitrations under bilateral investment treaties often have a long period between the initial notice and the formal commencement. The appointment of arbitrators, the definition of the procedural calendar, as well as any preliminary objections, can all take time. For example, many investment arbitrations last two to three years, even before the merits of the dispute are entered into,” explains attorney Nina Janković.
Knežević's offer to Alabaru
"In the meantime, we have offered three locations to the Arab investor Eagle Hills through our connections in the Emirates, namely the Adriatic Fair in Budva, the Meljine complex and Punto mimosa at the Kobile location, on the border of Montenegro with Croatia," said Duško Knežević through the Atlas Group's legal team.
ASK vs Spajic
In January 2022, the Agency for the Prevention of Corruption (ASK) initiated an investigation against the Minister of Finance and Social Welfare Milojko Spajić to determine the existence of a threat to the public interest indicating the existence of corruption in connection with the selection of the law firm Four Knights LLC from Switzerland to represent Montenegro in the arbitration proceedings initiated by businessman Duško Knežević, Atlas Capital Holding Limited and Meljine Complex Limited.
ASK then forwarded the opinion, along with the complete collected documentation, to the Special State Prosecutor's Office (SST) for assessment of whether a criminal offense for which ex officio prosecution was undertaken was committed in the specific case.
"Based on the procedure initiated ex officio, the Agency issued an opinion on February 18 of this year (2022 - ed.) determining that the procedure for selecting a legal representative of Montenegro following the public call by the Ministry of Finance to domestic and international law firms to submit bids for representing Montenegro in the arbitration proceedings against Duško Knežević, Atlas Capital Holding Limited and Meljine Complex Limited, published on March 22, 2021, constitutes a threat to the public interest within the meaning of Article 44, paragraph 2 and Article 72 of the Law on the Prevention of Corruption and may affect the integrity of the Ministry of Finance and Social Welfare and the Government of Montenegro," the ASK said at the time.
The Special State Prosecutor's Office did not respond to Vijesti whether the SDT acted in accordance with this opinion of the ASK, which was headed by Jelena Perović at the time.
As Vijesti unofficially learned, ASK has not received any feedback from SDT.
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