Budva Municipality: We were not registered as owners of land in Zavala, we believe that the Higher Court's ruling will be overturned

The Municipality of Budva challenged the Higher Court's ruling, stating that it was never registered in the land registers as the owner of the land on Cape Zavala, but rather the state of Montenegro.

"Vijesti" announced earlier today that the account of the Municipality of Budva has been blocked in the amount of 4,5 million euros, based on a decision on forced collection by public bailiff Darko Rajković, and based on a final judgment of the Higher Court that ruled in favor of the members of the Rafailović family.

Last week, the news reported that the Municipality of Budva was facing a new major financial blow because it would have to pay members of the old-time resident Rafailović family 4,2 million euros plus additional interest after the High Court ruled in favor of the locals who proved that their land on Cape Zavala, which separates Budva and Bečići, was nationalized without compensation decades ago.

These are 14 heirs who have been involved in a multi-year court case, which has now ended in their favor.

"It is clear that the judgment is unfounded, illegal and legally unfounded. This means that the Municipality did not take the land from the former owners, but the then state and, accordingly, it cannot be liable for compensation or return the land. Therefore, we believe that in the further proceedings the judgment will be annulled, after which we will initiate the procedure for collecting funds from those who blocked the Municipality's account. The enforcement decision is legally unfounded for several reasons, including that the Municipality filed an objection as soon as possible. It is based on the judgment of the Higher Court in Podgorica of December 23, 2025, which is stated to be final and enforceable. However, in this specific case, the aforementioned judgment was not properly delivered to the defendant's attorney, which is a legal requirement for its finality and enforceability. The defendant's attorney in the second-instance proceedings did not receive the original or a certified copy of the judgment, but only an uncertified copy, which does not constitute delivery within the meaning of the Law on Civil Procedure," This is stated in today's press release from the Municipality of Budva.

They claim that since the proper delivery of the judgment was not carried out, the judgment could not become final and binding nor can it have the status of an enforceable document.

"According to the Municipality's knowledge, there is no evidence in the case file that would confirm that the attorney-in-fact was served with the original or certified copy of the judgment. In addition to the objection to the Enforcement Decision, the Municipality will file a Review against the judgment of the Higher Court in Podgorica as soon as possible, since it is affected by a significant violation of the provisions of civil procedure and the incorrect application of substantive law. The said violation arises from the fact that the court acted on an irregular lawsuit, whereby key procedural issues related to: the defendant's lack of passive legitimacy, the defendants' lack of joint litigation, and the plaintiffs' lack of active legitimacy remained unresolved. Furthermore, the disputed cadastral plots have not been precisely identified, their actual purpose has not been determined, nor has it been determined whether and for whose benefit the disputed cadastral plots have been brought to their intended purpose," said the Municipality of Budva.

They state that the second instance court did not provide valid, complete or legally relevant reasons regarding the explicitly stated objection of the lack of passive standing on the part of the defendant Municipality of Budva, thereby additionally committing a significant violation of the provisions of civil procedure, which is reflected in the lack of reasons on decisive facts.

"Namely, the second instance court, in its operative part of the judgment, partially accepted the plaintiffs' claim for compensation for the market value of the nationalized land. However, it is indisputable from the official cadastral records that the Municipality of Budva is not registered as the holder of the property rights on any of the aforementioned cadastral plots, but rather the State of Montenegro and natural persons are registered as the holders of the property rights, and we come to the absurd situation that the Municipality, by paying the amount of 4,5 million euros, does not obtain the right of ownership on the disputed plots. This fact is of essential importance for the proper resolution of the issue of passive legitimacy, because the obligation to pay compensation can be determined exclusively towards the entity that is the holder of the relevant right or obligation in the substantive legal sense," the Municipality of Budva emphasized in a statement.

Despite this, the Higher Court, as they state, obliged the Municipality of Budva to pay compensation.

"By doing so, it not only incorrectly determined the existence of passive legitimacy on the part of the defendant Municipality of Budva, but also indirectly decided on the rights of the actual owners, without their active participation in the proceedings. Such a court decision is additionally problematic, considering that the defendant Municipality of Budva did not bring the subject real estate to its intended purpose, nor did it conduct procedures in relation to them that would determine public interest, nor are there any facilities of public importance on the disputed land. The absence of these facts clearly indicates that the second-instance court, by failing to properly examine the existence of the necessary joint and several litigants and passive legitimacy, as well as by providing incomplete and unclear reasons for the decisive facts, made a decision that is burdened with significant violations of the provisions of civil procedure, as a result of which it cannot survive in the legal system and produce legal effect," the Municipality of Budva states.

Considering all the objections raised regarding the lack of active legitimacy that the Municipality of Budva pointed out throughout the entire proceedings, as they claim, it was necessary for the court to determine all relevant circumstances with particular care and precision, in particular: the moment of establishment of the land registers, the time and legal basis of the first entry, the identity of the registered person, as well as the circumstances of any transfer of ownership rights.

"Only on the basis of such a complete and properly established factual situation could it be concluded with the necessary degree of certainty whether this is indeed the same person whom the prosecutors designate as their legal predecessor. This is especially true since the submitted material evidence contains obvious inconsistencies regarding key identification data, primarily the date of birth, which the second-instance court did not assess or provide any reasons for. This resulted in a lack of assessment of decisive facts, which resulted in the reasoning of the contested verdict remaining incomplete, unclear and legally untenable in the part relating to the existence of the prosecutors' active legal standing, which the court must take into account throughout the entire court proceedings, ex officio," the Municipality of Budva points out.

They emphasize that the High Court's judgment does not contain a complete, clear and correct identification of the disputed cadastral plots, which represents a serious deficiency that calls into question the legality and enforceability of the decision itself.

"Namely, in the operative part of the judgment, under point 10, the court awarded compensation for cadastral plot number 797/2 KO Bečići with an area of ​​1200 square meters, although it is indisputable from official cadastral data that the total area of ​​the said plot is 772 square meters. Such an obvious discrepancy between the operative part of the judgment and the content of the material evidence in the case files makes the contested judgment unclear and legally untenable. The aforementioned deficiency is not only of a formal nature, but also has a direct impact on the correctness of the decision on the amount of the awarded compensation, since the area of ​​the real estate is one of the key elements for its determination. Awarding compensation for an area that does not actually exist in the cadastral records indicates that the court did not conduct a conscientious and careful assessment of the evidence presented, nor did it check their mutual compliance, which violated the principle of material truth. Taking into account the aforementioned irregularities in the proceedings so far, as well as the damage caused by the blockade on this basis, the Municipality of Budva "In order to protect its rights, it will initiate other procedures to request a review of each individual decision in a specific matter," the Budva Municipality statement concluded.