"The Administrative Court's ruling annulled the illegal registration of the land of the 'Bajo Sekulić' Saltworks as state property. The court determined that the Saltworks was never state property, but rather the property of a joint-stock company, whose shares are listed on the stock exchange. The decision of the previous Government to register the property of a private company - without a court, without compensation and without a legal basis, as state property, has now been legally challenged and overturned," the statement from the shareholders of the 'Bajo Sekulić' Saltworks states after the recent Administrative Court ruling that the state had illegally registered the Saltworks as its property in 2022, which has now returned the shareholders the right to use the property of the oldest Ulcinj company.
The statement emphasizes that "from the perspective of European integration, state authorities have sought to resolve the Solana issue as urgently as possible, since this issue is directly related to Chapter 27 - Environment and Climate Change, which was opened in December 2018."
"As the deadlines for harmonizing legislation and implementing measures from that chapter are extremely demanding, regulating the property and legal status of protected areas was one of the key steps in fulfilling obligations towards the European Union. However, in the desire to quickly fulfill part of the obligations from Chapter 27, the fundamental principles from Chapter 23 - Judiciary and Fundamental Rights and Chapter 24 - Justice, Freedom and Security, which require respect for the rule of law, legal certainty and protection of property rights, were ignored. This created a serious legal imbalance which, instead of accelerating Montenegro's European path, may represent an obstacle to closing key negotiation chapters," the shareholders claim.
They emphasize that every Government of Montenegro, including all previous governments, not just the forty-second, was legally obliged to act upon the request of the Saltworks to convert the right of use into the right of ownership.
"This obligation arises from Article 419 of the Law on Property and Legal Relations (ZOSPO), which clearly stipulates that the right of use of holders who have acquired this right legally and in accordance with the law shall be recognized and registered without additional legal work, based on the law itself. However, none of the previous governments has fulfilled this legal obligation. In doing so, they violated the law by avoiding action, so there is no question of any 'convenience'. Contrary to the claims that the land was 'allocated to Solana outside the law', the real truth is that this right was never even formally recognized, although it was a legal obligation," it was announced.
It is recalled that in a large number of other privatization processes, such as HTP Budvanska rivijera, Plantaže, HTP Ulcinjska rivijera and numerous other companies, Article 419 of the ZOSPO was applied without controversial interpretations and the right of use was converted into the right of ownership, without resistance and without political controversies.
"That is precisely why the Solana case stands out as an unjust exception, with serious legal and social consequences," the statement reads.
It is stated that "it is particularly important to point out that the Administrative Court's ruling 'restored the status quo on the right of use', which means that the competent authorities should now, without further delay, fulfill their legal obligation and implement the conversion of the right of use into the right of ownership - as has already been done in dozens of other cases, in accordance with the applicable law."
"Otherwise, Montenegro could be exposed to serious legal and financial consequences. According to public statements, the state could face lawsuits worth more than 200 million euros, which, in the event of failure to act according to the law, could be filed before domestic and international courts, including the European Court of Human Rights in Strasbourg," the statement reads.
It is explained that the Administrative Court's ruling did not finally resolve the problem, but rather temporarily prevented financial and institutional collapse, "because the loss of shareholders' assets without compensation would represent a serious violation of domestic and international law, with direct consequences for the budget of Montenegro and the credibility of its legal order."
"It is important to point out that the costs of expert opinions, court proceedings, interim measures and legal blockades of the bankruptcy proceedings have already been incurred, and they are incomparably smaller than the damage that would occur if shareholders were forced to seek protection of their rights internationally. Each subsequent step of avoiding the obligation under Article 419 of the ZOSPO leads to direct liability of the state for non-compensation of property, not only before domestic legislation, but also before bodies that interpret international standards of human rights, property and fair trial," the shareholders claim.
They remind that shareholders, including state funds, invested in Solana through stock market transactions, in accordance with capital market laws and rules.
"Thus, the state recognized the legitimacy of private property, because it acted as a co-owner through shares, and not as the titleholder of the land. The subsequent attempt to administratively register that property with the state represented a serious violation of the basic principles of legal certainty," the statement reads.
If, as it is added, the narrative that the land did not belong to Solana were accepted, it would mean that state institutions that participated in the privatization, issuance and trading of shares essentially issued shares without any asset backing.
"The absurdity of such a stance is obvious - how is it possible that tens of millions of euros were poured into a publicly listed joint-stock company whose key assets allegedly did not even belong to the company. According to the Law on Business Companies of Montenegro, a share represents a participation in the capital and assets of a company, and according to the Law on the Capital Market, every issuer of shares is responsible for ensuring that its financial and legal data are true, accurate and based on the actual property basis. If it were claimed that the land never belonged to Solana, this would directly mean that the state, through its institutions, mediated in the issuance of financial instruments without actual assets, which is legally, institutionally and reputationally unsustainable," the statement reads.
It is stated that before international courts, particularly the European Court of Human Rights in Strasbourg, such a practice would be recognized as a violation of the right to peaceful enjoyment of property, guaranteed by Article 1 of Protocol No. 1 to the European Convention on Human Rights.
"In several precedent-setting cases, such as 'Pressos Compania Naviera v. Belgium' and 'Broniowski v. Poland' - the Court has confirmed that even anticipated ownership, if lawfully acquired and based on a legitimate regulatory framework, enjoys full legal protection. The most relevant is the case of 'Yukos shareholders v. Russia', in which the European Court ruled that the state cannot unilaterally devalue or expropriate the functional ownership of a company whose shares were lawfully issued and purchased. In that case, the defendant state was obliged to pay around 1,9 billion euros in damages because the shareholders were deprived of the values that belonged to them, despite the fact that the formal titleholder of the property was not each of them individually," the statement emphasizes.
In the case of Solana, it is added, the shareholders legally acquired ownership shares, invested significant funds, were duly registered in all registers and had indisputably held rights for almost two decades.
"Therefore, the only legally sustainable and institutionally consistent position is the one confirmed by the Administrative Court of Montenegro - that the shares of Solana had real and legal coverage, because they reflected participation in the legitimate property of the company, including land. Anything else would mean that the state itself denies its own laws, privatization processes and elementary principles of legal certainty, not only before domestic, but also before international courts," it is emphasized.
Shareholders say "the claims that Solana was purchased for 800.000 euros are false and manipulative."
"In just one transaction on March 26, 2007, 4,5% of Solana's shares were purchased from state funds for a total of 2,5 million euros, at a price of 15,2 euros per share. For comparison, the nominal value of one share was 9,1302 euros, which means that the market price paid was about 66% higher than the nominal one - fully in accordance with the rules of the free market. Eurofond's total investments in Solana, including the accumulation of shares, assumption of liabilities, recapitalizations and operational management - amount to over 11,5 million euros. This data is documented in financial and brokerage reports and is easily verifiable," the shareholders claim.
They recall that for political or sensationalist reasons, the claim that the Solana land was sold for 5 cents per square meter is often spread among the public.
"Such a formulation is completely wrong, both legally and economically, because it implies that someone directly purchased the land, which never happened. The land of the Solana was never the subject of a sale or purchase as a physical asset. Only packages of shares of the joint-stock company Solana "Bajo Sekulić" AD were purchased, which were public, stock-listed securities. Each transaction was carried out through official brokerage channels, at prices formed based on supply and demand on the capital market. When someone buys a share of a company, they do not buy a specific square meter of land, but acquire a proportional share in the total assets and liabilities of that company, including land, facilities, employees... Therefore, any conversion of the price of shares to a square meter of land is legally unfounded and economically meaningless because it is a gross simplification that misleads the public," it states.
It is also clarified that the shareholders have never disputed the idea of Solana becoming a Nature Park.
"On the contrary, as socially responsible investors, we are ready to discuss any model for protecting this unique space. However, the Nature Park cannot be a legal basis for the seizure of private property. Just as the Durmitor katuns were not taken from cattle breeders even though they are located in the National Park, so too cannot Solana be taken from its rightful owners without compensation. Solutions must be sought in accordance with the law, not political will," the statement reads.
They call on all political and institutional actors to abandon populism and engage in constructive dialogue with them and representatives of the bankruptcy administration and the court.
"This case is a test for the legal order of Montenegro - whether we are a country where property is respected or a country where it is erased by decree. Investments, especially foreign ones, depend precisely on the answer to that question," the statement concludes.
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