Regional water supply: the Constitutional Court annulled the decision of the Supreme Court, Strabag to return 12 million euros

The Constitutional Court of Montenegro for the second time made a decision by which it annulled the decision of the Supreme Court of Montenegro and confirmed the correctness of the positions of DOO "Regionalni vodovod Montegorsko primorje" regarding this court proceeding, which was brought about because it is contrary to the Agreement between Regionalni vodovodsko and Strabag AG. contrary to the rules and standards of international and domestic arbitration law, the recognized decision of the non-contracted, and therefore incompetent arbitration panel of the ICC from Paris.

We transmit the announcement of the Regional Water Supply in its entirety:

"The Regional Water Supply timely informed the Government of Montenegro and relevant ministries about the aforementioned. Accordingly, the Board of Directors of the Regional Water Supply decided at the XXXI session to address the public regarding the Decision of the Constitutional Court of Montenegro.

The Constitutional Court of Montenegro concluded, thus confirming the position of the Regional Waterworks, that the Supreme Court of Montenegro violated the constitutionally guaranteed right to a fair trial and access to the court for the reason that it did not decide on the merits of the review of the Regional Waterworks filed against the decision of the Appellate Court of Montenegro, which right is guaranteed by Article 32 of the Constitution of Montenegro and Article 6 paragraph 1 of the Convention on the Protection of Human Rights and Fundamental Freedoms.

We must remind that due to such decisions of the Appellate Court of Montenegro and the Supreme Court of Montenegro, the account of the Regional Water Supply was blocked for 268 days (August 14, 2018 - May 9, 2019), until the collection of 12 million euros, despite the fact that the competent Commercial Court of Montenegro issued as many as 4 judgments in which it was determined that there is no basis to recognize the decision of non-contractual and non-jurisdictional international arbitration and that, accordingly, Stabag AG is not entitled to even 1 euro, not 12 million euros.

The aforementioned decisions led to additional and direct damage to the Regional Waterworks in this two-year period, in the amount of around 4,9 million euros.

Therefore, the Regional Waterworks will persist in its positions until the end of this court proceeding, because the decisions of the Constitutional Court of Montenegro are binding on all state bodies, so according to this decision, we expect that the Supreme Court of Montenegro, in the retrial according to our Audit, will not behave overly formalistically , that is, that his decisions should not be the product of a "mechanical" application of positive law (as stated by the Constitutional Court of Montenegro in its decision), but that he should take into account the specifics and importance of the legal field to which the specific court procedure belongs.

The Constitutional Court of Montenegro clearly ordered the Supreme Court of Montenegro to ensure uniform application of the law, because the "right to court" was violated by the Regional Waterworks. This is one of the most important constitutional obligations of the Supreme Court of Montenegro, according to which it should comprehensively respond to the objections of the Regional Water Supply, and in particular, provide an answer and take a position on the disputed issue: whether Montenegrin courts can recognize the decisions of a non-competent international arbitration court, which is not agreed between the parties to the dispute?

The Commercial Court of Montenegro, we repeat, made 4 Decisions in favor of the Regional Waterworks. The first three decisions were annulled by the Appellate Court of Montenegro, while the fourth time, the Appellate Court of Montenegro, on March 28.03.2018, XNUMX. year, issued a decision by which he changed the judgment of the Commercial Court of Montenegro, and for the first time in Montenegrin and regional judicial practice, recognized the decision of non-contractual, and therefore non-competent arbitration, MTK from Paris.

On March 12, 2021, the proxies of the Regional Water Supply submitted an urgent request to the Supreme Court of Montenegro to act on the submitted audit. We are sure that no other decision can be made except that the decision of the Appellate Court is abolished and thus the principle of justice and fairness will be satisfied. Only in this way will the sensitive interests of business entities be protected from court proceedings that may be conducted based on the established practice of recognizing non-contractual arbitration, which is contrary to the Law on Arbitration of Montenegro and international standards of arbitration law.

On the other hand, the expected return of 12 million euros, which in that case would be returned to the Regional Waterworks, would contribute to the Regional Waterworks once again operating stably and in a long-term sustainable manner.

We sincerely hope that the competent institutions of Montenegro will approach this legal challenge in the same way as all other countries, whose system of values, as a society as a whole, we unwaveringly strive for," the announcement states.