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BOSNIA AND HERZEGOVINA 3 B
Viši Privredni Sud, Banja Luka, 14 March 2013
(Elektrogospodarstvo Slovenije-razvoj in inžinjering d.o.o. v. Rudnik i termoelektrana Ugljevik a.d. Ugljevik)
BOSNIA AND HERZEGOVINA 3 B
The High Commercial Court of Banja Luka affirmed the decision of the Bijeljina District Commercial Court (BOSNIA AND HERZEGOVINA 3 A), which had referred to arbitration a dispute in respect of the construction and joint operation of a thermal power plant. The lower court had found that the requirements for referring the parties to arbitration were met, as the arbitration agreement was in writing, concerned existing or potential disputes under the contract, had been concluded by parties having the necessary legal capacity to do so, and was not null and void, inoperative or incapable of being performed. The appellate court agreed with the court below that it was irrelevant that the arbitration clause referred to an entity -- the Joint Association of the Yugoslav Electric Power Industry -- which no longer existed, pointing out that the law establishing the Joint Association had not designated it as an arbitral instituion.
The court discusses the meaning and effect of the referral of the resolution of disputes to arbitration, including: who can ask for referral and when, whether a party has waived its right to request arbitration, the defense that there was no contract at all; whether there was a condition precedent to the commencement of arbitration (e.g. mediation), stay of proceedings v. compelling arbitration, and national procedural specificities such as remand and removal (US), effect of class action. etc.
The court discusses how to interpret the Convention’s requirement that the agreement is not null and void etc., as well as specific cases of invalidity: e.g., lack of consent (misrepresentation, duress, or fraud), vague wording of the arbitral clause; other terms of the contract contradict the intention to arbitrate, etc.
More-favorable right provision: The court discusses the application of the 1961 European Convention together with the New York Convention, and the relationship between the two treaties.