It’s not expensive – when you don’t pay out of your own pocket. So the lessons are unlearned, and there are no solutions. This was shown by the Viaduct case, in which Bosnia and Herzegovina loses 18,000 BAM every day. The debt now exceeds 113 million. In addition to this one, there are also open issues of other arbitration disputes being conducted against our state, the value of which reaches almost two and a half billion. While concerns are growing that possible losses would paralyze budgets at all levels of government, former attorneys emphasize that a peaceful solution must be a priority, and unilateral termination of concessions a thing of the past.
Two billion and 400 million marks are the heavy arbitration disputes currently being conducted against Bosnia and Herzegovina. The most money is being claimed from the state by Elektrogospodarstvo Slovenije – 695 million euros. The dispute is related to the investment in RiTE Ugljevik, and this company confirmed earlier this month that talks are underway and that an agreement is expected.
Second on the list is Pramod Mittal, who is seeking $400 million for alleged damages related to the Lukavac-based GIKIL. In the GIKIL case, all costs are borne by Bosnia and Herzegovina.
“We have cooperated well on several cases, unlike the last GIKIL case, where the Federation Government and the Tuzla Canton refused to talk about it, as if it was none of their business,” said Mariofil Ljubić, former attorney general of the Bosnia and Herzegovina Attorney General’s Office.
The Croatian Electric Power Company is also claiming one hundred million euros for the failed delivery of electricity to the Gacko Thermal Power Plant. In this case, arbitration has not yet been conducted, and an attempt is being made to find a way to pay through an amicable settlement. The former attorneys note that the possibility of an amicable settlement must be a priority.
“At all times, one should strive for a peaceful resolution of the dispute in the initial phase, until it becomes public. Once it becomes public, it is already too late,” Ljubić emphasized.
“It is common practice that before initiating arbitration proceedings, before filing a lawsuit, an attempt is usually made to peacefully resolve a particular dispute,” said Ismet Velić, former attorney at the Attorney General’s Office of Bosnia and Herzegovina.
There are many reasons for arbitration, and cases of concession termination are at the forefront. Such is the case with Kermas Energija from Zagreb, which announced arbitration due to the termination of a concession contract with the RS Government, and is seeking 102 million euros.
Unilateral termination of a concession also cost us in the case of Viaduct, which was first granted and then revoked by the RS Government. Without going into the question of why the authorities in this Bosnian entity decided to grant a concession to companies with questionable capabilities, Velić notes that unilateral termination of the contract is not the way to solve the problem.
“We are terminating contracts, we are invalidating certain decisions, that is not possible! Once it is made and becomes final, it is very difficult to question a decision. There are means, possibilities, but we must never assume that it will be easy, and here it is done lightly. So, a decision is not just invalidated, and certainly not unilaterally terminating a contract.”
A potential solution could be an initiative adopted in the House of Representatives of Bosnia and Herzegovina, which envisages amendments to the Law on Borrowing, Debt and Guarantees of Bosnia and Herzegovina. They would treat all arbitration decisions and obligations arising from them as external debt, but the person liable to pay would be the one who incurred the debt and caused it. However, the question is how much will there be in the House of Peoples, due to the fact that the SNSD, at least when it comes to the Viaduct debt, is proposing a solution that is not acceptable to the parties from the Federation, Federalna writes.
