Bosnia and Herzegovina (BiH) could face the largest arbitration ruling in its history. A dispute is underway that Elektrogospodarstvo Slovenije launched against BiH, over pre-war investments in the Ugljevik Mine and Thermal Power Plant, worth 695 million euros, or about 1.4 billion BAM. This dispute is currently in a standstill phase, and it is expected to be resolved by the end of this month.
The arbitration in Washington is not the only one that the Ugljevik Mine and Thermal Power Plant is conducting with the Elektro-Slovenija. One conducted in Belgrade, worth 245 million BAM, it has already lost. On that occasion the Ugljevik Mine and Thermal Power Plant undertook to pay Slovenians an additional 127 million BAM for undelivered energy. The management of RiTE Ugljevik points out that it was agreed with Elektro-Slovenija that part of the interest in the amount of 100 million BAM will be written off from this sum, and that the dispute in Washington could soon also be resolved.
“I expect that this proposal will very soon be realized and that by the end of the ninth month, a contract will finally be signed, also on the third open issue. As part of the closing and signing of the contract regarding this interest, the so-called arbitration in Washington will also be closed, so that the axe above the neck that for years hung over RiTE Ugljevik and Republika Srpsa (RS) will be removed,” says Diko Cvjetinovic, director of RiTE Ugljevik.
From Elektro-Slovenija, it has been confirmed that the dispute in Washington is temporarily frozen:
“The arbitration procedure is currently on hold at the request of the parties, while negotiations on a possible amicable settlement of the case are underway. Considering that the arbitration procedure is still ongoing, we cannot comment on other details.”
The president of the SDS Caucus of Deputies in the National Assembly of RS (NARS), Ognjen Bodiroga, via his profile on the social network X, stated that already in 2018 in the “Official Gazette of RS” was published the Agreement on international rights and obligations regarding the arbitration that Elektro-Slovenija initiated against BiH in Washington, under which any eventual compensation of monetary damages that arrives to the account of BiH will be paid by the Government of RS. He reminded of the recently concluded other ongoing disputes.
“After the loss of 110 million KM from Viaduct and after the potential payout to ‘Comsar Energy’ of 240 million BAM, RS in Washington faces a new loss. This time, the amount in question is about 695 million euros,” stated Bodiroga.
Transparency International points out that, as a rule, arbitration proceedings and everything related to them are hidden from the public.
“When it comes to arbitrations that threaten a society, in this case BiH, that is RS, it is of crucial importance that those who will represent and who will participate in that arbitration proceeding – give at least a minimum of information, since it is a matter of a large sum of money that threatens to have to be paid,” says Damjan Ozegovic from Transparency International BiH.
Economists consider that, when it comes to arbitrations, but also all those things that preceded and led to them, there should be responsibility, at least moral, which so far has not been the case.
“These are matters where responsibility really needs to be identified and individualized and criminal proceedings initiated, because if you don’t do your job, you cause damage, you have to answer for that. Neglect of one’s job costs us citizens a lot. And it will cost,” says Zoran Pavlovic, economic analyst.
For numerous lost disputes in which hundreds of millions of BAM have been lost, so far no one has been held responsible, so taking this fact into account, most likely no one will be in the future either, regardless of the fact that the potential loss of a dispute such as RiTE Ugljevik would be catastrophic for the whole of BiH.
