Montenegro – Court Injunction in favor of Adriatic Properties – resolvement expected upon arbitration proceedings in London
By the decision of the Commercial Court of Montenegro, issued on September 15, 2021, a Court Injunction has been imposed allowing Adriatic Properties, the lessee, to enjoy the leased property peacefully.
When on January 31, 2007, HTP Budvanska Riviera as the lessor and the company Adriatic Properties as the lessee concluded the Lease Agreement for the hotels Kraljičina Plaža, Sveti Stefan, and Miločer for a period of 30 years, the Government of Montenegro in the same Agreement was the guarantor that the lessee, among other things, will enable “the right on peaceful and undisturbed possession of property without interruption”. In the event of a dispute between the parties, the contract determines the jurisdiction of the arbitration in London.
However, in the years that followed, certain controversial issues arose in the public regarding the Agreement itself, including the legality of the state property of Adriatic Properties and whether the property in possession of the lessee coincides with that which was the subject of the lease. The public was interested in these issues, especially due to the fact that the area covered by the lease is considered one of the most attractive locations on the Adriatic coast.
Relations between the contracting parties were further disrupted by a statement for the media of the Minister of Economic Development in the Government of Montenegro, who stated that the lease agreements for this property are a null and void legal transaction. Shortly after this statement, on March 30, 2021, a group of citizens of the municipality of Budva, on which territory the leased real estate is located, broke down the fence that secured the leased property and attacked the security workers.
The tenant turned to the Commercial Court of Montenegro for a measure to stop the harassment. By the decision of the Commercial Court of Montenegro, issued on September 15, 2021, a Court Injunction has been imposed allowing Adriatic Properties, the lessee, to enjoy the leased property peacefully. According to the court’s order, the aim of the Injunction is “to preserve the factual situation in order to prevent the use of force or the occurrence of irreparable damage”.
The interim measure will, by a court decision, last until the end of the arbitration before the London court, which Adriatic Properties is obliged to initiate within 60 days from the day of receipt of the decision. Until its completion, the Government of Montenegro will, by the said decision, have to refrain from all further actions in the direction of hindering the lessee in the peaceful enjoyment of the leased property.
JPM Jankovic Popovic Mitic – Vukmirovic Misic