The Court of Appeal upheld the first-instance verdict of the Commercial Court in late December in a dispute initiated against the state by the company "Sea Pioneer Montrenegro" from Herceg Novi, believing that it was damaged by the government's actions related to the concession for performing maritime pilotage in the Bay of Boka Kotorska.
The Court of Appeal upheld the first-instance judgment of the Commercial Court, which on October 9 last year dismissed the claim of the Herceg Novi company as unfounded, but ordered the Commercial Court to re-issue a decision on the payment of court costs. “Sea Pioneer” had sued for over 1,2 million euros in damages, believing that the company was denied the right to port pilotage, which it had won in a government tender in 2018, by subsequent state actions.
The claim related to the payment of damages of 205.824 euros for 2022 with default interest of 54.643,45 euros, costs of engaging professional and administrative workers of 63.912,53 euros, material investments under the concession contract of 127.572.72 euros and lost profits in the amount of 761.655,15 euros.
The Appellate Court Panel concluded that the Commercial Court in the first instance judgment did not violate the provisions of civil procedure, and that "the factual situation was correctly and completely established, and with regard to the main matter, the substantive law was correctly applied."
"It was also noted that in this specific case, there could be no legitimate expectation on the part of the plaintiff (Sea Pioneer - ed.) because the decision to award the concession was the subject of an administrative dispute with which the plaintiff was aware, and thus he was aware of the risk of its annulment. In addition, the concession relationship is of a public law nature, and the contract in question expressly states that the risk of a possible interruption of the activity does not entitle the plaintiff to compensation for damages. Therefore, no legally protected legitimate expectation could arise regarding the duration of the concession, or the realization of future profits," the Court of Appeals' judgment, which was delivered to the parties in the proceedings these days, stated.
According to the official results of the 2018 tender, the Government of the Prime Minister Duško Marković (DPS) only in the summer of 2020 awarded the maritime pilotage concession in Boka to the companies Luka Kotor and “Sea Pioneer Montenegro” from Herceg Novi, and in August of that year, concession agreements were signed with them for a period of five years. However, the third participant in the competition, the company “Boka Pilot&Tug Service” from Bijela, initiated a dispute before the Administrative Court and won it twice, proving that its offer, which was ranked first in the 2018 tender, was not “incomplete” as the state representatives characterized it in order to eliminate it from further proceedings. In April 2022, the Administrative Court finally issued a ruling annulling the Government’s decision from 2020 to grant the pilotage concession to Luka Kotor and “Sea Pioneer Montenegro” and obliged it to conduct a new procedure for granting the concession. The state in the form of the Maritime Safety and Port Management Authority, which was supposed to do this, however, has not done so to this day, but rather, by decision of the 43rd Government, Dritan Abazovic (URA) granted the exclusive right to perform pilotage services to the majority state-owned company Luka Kotor.
Believing that due to everything that has happened, including the ban on cruise tourism activities in 2020-2021 due to government measures to prevent the spread of coronavirus, the company "Sea Pioneer Montenegro", led by Captain Miodrag Kršanac, sued the state, seeking compensation for the concession fee paid, the costs of workers, the purchase of materials and equipment for carrying out pilotage activities, as well as for lost profits.
At the trial before the Commercial Court, "Sea Pioneer Montenegro" claimed that the Government, through various legal complications in the period from 2020 to the end of 2023, practically prevented the company from engaging in the lucrative maritime pilotage business in Boka Bay in accordance with the 2018 tender. They pointed out that, following the decision of the Administrative Court, the Government unfoundedly granted the right to perform pilotage only to the Port of Kotor company, even though it is not exclusively owned by the state, and that the state has not yet implemented its own conclusion from April 2014 to prepare and announce a new tender for the award of a pilotage concession in Boka Bay.
The financial expert pointed out that "Sea Pioneer Montenegro" did not pay the concession fees for 2023 and 2024, and therefore cannot claim them as compensation, while the protector of property and legal interests of Montenegro, who represented the state, emphasized that the Herceg Novi company's demands for compensation for material and employee costs are unfounded because it had already incurred them in 2015 when it first entered the pilotage business in Boka Bay, and that according to the laws, but also the tender rules that the bidders accepted, those interested in obtaining a concession knowingly run the risk of losing their potential material investments in that business if, for any reason, the conceding state terminates or does not conclude a concession agreement with them at all.
"This is exactly the situation that arose in this case - the decision to grant the concession from 2020 was annulled by the Administrative Court's ruling from 2022 following a third-party lawsuit, after which the Government noted the legal consequence of the annulment and determined further steps towards acting in accordance with the court decision, which is the state's duty," the Protector of State stated.
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