International arbitration law and rules in Serbia

Arbitration is becoming increasingly popular as a way of resolving commercial disputes. However, arbitration is still most common in agreements governing international business relations, where there is a traditional mistrust among foreign companies in the competence of domestic courts. Recently, the advance of arbitration in Serbia has been focused on the extension of the jurisdiction of arbitration, rather than the improvement of arbitration rules. In general, arbitration laws, as well as the rules of arbitral institutions, have a satisfactory legal framework, and the professional community is focused on broadening the use of arbitration as a dispute resolution mechanism. The courts in Serbia are also showing a positive attitude towards arbitration and awards rendered before arbitral institutions as enforcement decisions suggest a strict interpretation of the grounds for refusal of enforcement set out in the Arbitration Act.

1.1.1 In Serbia, the law on arbitration is contained in the Serbian Arbitration Law enacted in 2006 (Serbian Arbitration Law or SAL). It was adopted through a process of legal reform to promote arbitration as the common way of settling commercial disputes in Serbia. The SAL summarises the provisions relating to arbitral proceedings that were previously contained in the Law on Civil Procedure 1996 and the Serbian Act on Conflict of Laws 1982 (as amended in 1996 and 2006). It is based on the UNCITRAL Model Law (1985).

1.1.2 The Yugoslav Chamber of Commerce founded the Foreign Trade Arbitration in 1947 in Belgrade. The former Yugoslavia (which comprised Serbia as a federal republic) was the only European socialist country that managed to develop some kind of arbitration practice for national disputes. Although the Law on the Civil Code from 1956 reserved arbitration only for “disputes with foreigners”, in 1963 this changed and Yugoslavia made arbitration possible in relations between domestic companies which led to the formation of arbitration institutions within the chambers of commerce of the republics and provinces of Yugoslavia. 

1.1.3 After 1990, significant changes took place. Arbitration was permitted in relations between all domestic legal entities (legal and natural persons). In addition, arbitration was permitted not only for resolving commercial disputes but for disputes about rights that all parties are free to waive, provided the law did not require those types of disputes to be settled exclusively by other courts.

1.1.4 The first arbitral institution in Serbia was the Foreign Trade Court of Arbitration at the Serbian Chamber of Commerce, which was established in 1947. The Permanent Arbitration at the Chamber of Commerce and Industry of Serbia (PA) was founded in 2016, in lieu of two long-standing independent arbitration institutions that existed at the Chamber of Commerce and Industry of Serbia: the Foreign Trade Court of Arbitration and the Permanent Court of Arbitration. The PA is a permanent arbitration institution which provides for resolution of domestic and international commercial disputes by arbitration or international mediation when the parties have agreed upon its jurisdiction. It acts independently of the Serbian Chamber of Commerce.

1.1.5  The current rules of the PA (PA Rules - “Official Gazette of the Republic of Serbia” no. 112/15), provide for both arbitration and conciliation as means of settling disputes before the PA. The modern solutions contained in the PA Rules are recommended by international arbitration experts and practitioners in Serbia.

1.1.6 In addition to PA, the Belgrade Arbitration Center (BAC) was established in 2013 as a permanent arbitral institution that administers domestic and foreign disputes, assists in technical and administrative aspects of ad hoc arbitral proceedings under UNCITRAL or other rules, organises and conducts mediation sessions and provides for other services closely related to dispute settlement. The seat of the BAC is in Belgrade.

1.1.7  All disputes arising out of or in connection with the present contract are finally settled by arbitration organised in accordance with the Rules of the BAC (BAC Rules) that have been adopted by the BAC Board on 24 December 2013 and are applicable as of 1 January 2014.

2.1.1 The provisions of the SAL apply to both domestic and international arbitration, provided that the seat of arbitration is in the territory of the Republic of Serbia. However, parties to an international arbitration are free to agree otherwise if they wish.

2.1.2  International arbitration is defined in the SAL as being an arbitration relating to a dispute arising out of international business relations. In particular, the arbitration will be considered to be international if:

• the parties have, at the time of conclusion of the arbitration agreement, their places of business in different states; or
• the seat of arbitration, the place where a substantial part of the obligations of the business relationship are to be performed or the place with which the  subject matter of the dispute is most closely connected, is situated outside the state in which the parties have their places of business. 1 Serbian Arbitration Law, art 3 following the definition in the Model Law (1985), art 1(3) (see full text in http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf).  

2.1.3  Furthermore, arbitration is deemed international if the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one state. 2 Serbian Arbitration Law, art 3.  

2.2.1  The SAL is based on the UNCITRAL Model Law (1985), the framework of which is as follows:

• Chapter 1: Basic provisions, such as the scope of application of the act and provision for which disputes are eligible for arbitration or international arbitration;
• Chapter 2: The arbitration agreement itself and the third chapter addresses the procedure for setting up the arbitral tribunal;
• Chapter 3: The procedure for setting up the arbitral tribunal;
• Chapter 4: The provisions about arbitrators;
• Chapter 5: The jurisdiction of the arbitral tribunal;
• Chapter 6 & 7: the provisions relating to the conduct of arbitral proceedings and the rendering of the award;
• Chapter 8: Setting aside an award. 
• Chapter 9: Recognition and enforcement of foreign awards.

2.3.1 The underlying principles of the SAL are:

• equality, meaning that all parties must be treated fairly and equally; 3 Ibid, art 33.  
• party autonomy, meaning that the parties can decide upon the procedure of the arbitration in many respects, although the mandatory provisions of the SAL must be observed; 4  Ibid, art 2.  
• due process, meaning that all parties must have the opportunity to present their case, evidence and position with respect to acts and proposals of the opposing party. 5 Ibid, art 33.  

3.1.1 The SAL does not contain a definition of an arbitration clause as set out, for example, in article 7(1) of the UNCITRAL Model Law (1985). 6 For the text of the Model Law (1985), see http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf).  However, it provides that an agreement to arbitrate may be contained in a contractual clause or in a separate contract. 7 Serbian Arbitration Law, art 9.  An arbitration agreement may be concluded after a dispute has arisen. 8 Ibid, art 11.  

3.1.2 It is an accepted principle that the arbitration agreement binds only the parties to the agreement. However, an arbitration agreement will remain in force in the event of an assignment or subrogation.

3.2.1 An arbitration agreement should be in writing and comply with the formal requirements under the SAL. 9 Ibid, art 12 based on the Model Law (1985), art 7(2) (see full text in http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf).   

The arbitration agreement must either be contained in a document signed by the parties, or concluded by an exchange of messages through a means of communication that provides a written record of the parties’ agreement, regardless of whether the messages have been signed by the parties or not.

3.2.2 Furthermore, an arbitration agreement shall be deemed to exist when the claimant initiates arbitral proceedings in writing and the respondent either expressly accepts the arbitration in writing or by a statement which is recorded in the minutes of the arbitral proceedings, or fails to challenge the existence of the arbitration agreement or the jurisdiction of the arbitral tribunal before submissions on the subject matter of the dispute are submitted. 10 Serbian Arbitration Law, art 12.

3.3.1 The SAL defines arbitrable disputes as being pecuniary disputes concerning rights that the parties can freely waive and excluding disputes that are reserved to the exclusive jurisdiction of the Serbian courts. 11 Ibid, art 5.  Furthermore, the SAL designates that any natural or legal person (including the Serbian State), who has capacity to be a party in civil proceedings may be a party to an arbitration agreement. Under Serbian law, every natural and legal person may be a party to civil proceedings. 12 Civil Procedure Law 2011 (as amended in 2014), art 74.  

3.3.2 Certain pecuniary disputes are not arbitrable if they fall under the exclusive jurisdiction of the Serbian courts. For example, real estate matters relating to properties situated in Serbia, hereditary disputes (including cases where a foreign decedent owned real estate in Serbia) and disputes arising from family law relations are reserved to the Serbian courts. 13 See Serbian Law on Conflict of Laws 1982 (as amended in 1996 and 2006).  

3.4.1 The SAL accepts the doctrine of separability. An agreement to arbitrate concluded in the form of an arbitration clause within a larger agreement is considered independent and separable from the other terms of the contract. 14 Serbian Arbitration Law, art 28.

3.5.1 The SAL, following the UNCITRAL Model Law (1985), stipulates that a Serbian court, upon the motion of a party submitted prior to any submissions on the subject matter of the dispute, will dismiss an action brought before it by a party for lack of jurisdiction if an action is brought in relation to a dispute that is the subject of an arbitration agreement. 15 Ibid, art 14.  This is the position unless the court finds that the arbitration agreement is manifestly null and void, inoperative or incapable of being performed.

4.1.1 The parties are free to determine the number of arbitrators to conduct the arbitral proceedings, albeit that the number of arbitrators must be an odd number. 16 Ibid, art 16.  An arbitral tribunal can be composed of one arbitrator (sole arbitrator), three arbitrators or any uneven number of arbitrators. 17 Ibid.  

4.1.2 If the parties fail to determine the number of arbitrators, their number shall be determined by a person or arbitral institution designated by the parties’ agreement. If no appointing authority is designated by the parties or the appointing authority fails to act, the number of arbitrators shall be determined by the competent Serbian court. 18 Ibid.  

4.1.3 If the dispute is to be resolved by a sole arbitrator, the parties shall agree on the appointment within 30 days of the date on which one party requests the other to jointly appoint the arbitrator. Should the parties fail to reach an agreement, the appointment shall be made by the appointing authority. If there is no appointing authority, or the appointing authority fails to act, the appointment shall be made by the competent Serbian court. 19 Ibid, art 17.  

4.1.4 If the dispute is to be resolved by three arbitrators, each party shall appoint one arbitrator within 30 days of the date on which the other party requests it to do so. 20 Ibid.  If the requested party fails to do so, the arbitrator shall be appointed by the appointing authority designated by the parties. If there is no appointing authority, or the appointing authority fails to act, the appointment shall be made by the competent Serbian court. 21 Ibid.

4.1.5 The third arbitrator, who presides over the arbitral tribunal and is referred to as the “President”, shall be elected by the two previously appointed arbitrators within 30 days of the date of their appointment. 22 Ibid.   Should they fail to elect the President, the appointment shall be made by the appointing authority. If there is no appointing authority or the appointing authority fails to act, the appointment shall be made by the competent Serbian court. 23 Ibid.  The decision of the Serbian court on the appointment of an arbitrator is not subject to appeal. 24 Ibid.

Grounds for challenge

4.2.1 The grounds for challenging arbitrators stipulated in the SAL correspond to those in the UNCITRAL Model Law (1985). 25 Serbian Arbitration Law, art 23 and the Model Law (1985), ch 3, art 12 (see full text in http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf).  An arbitrator may be challenged only if circumstances exist that justifiably raise doubts as to the arbitrator’s impartiality or independence or if the arbitrator does not possess the qualities agreed upon by the parties. 26 Serbian Arbitration Law, art 23.

4.2.2 An arbitrator may be challenged only if grounds for challenge have arisen – or if the challenging party became aware of such grounds – after the arbitrator was appointed. 27 Ibid, art 24(2).

Procedure for challenge

4.2.3  A party can submit a request in writing challenging an arbitrator within 15 days of becoming aware of the arbitrator’s appointment, or of the  grounds  for  the  challenge, unless otherwise agreed by the parties. 28 Ibid, art 24.  Where the parties have entrusted the administration of the arbitral proceedings to an arbitral institution, the parties shall be deemed to have agreed that any challenge be resolved in accordance with that arbitral institution’s rules. 29 Ibid.  

4.2.4 Unless otherwise agreed by the parties, the competent Serbian court shall decide on the challenge of an arbitrator. 30 Ibid.   However, the arbitral tribunal may continue the arbitral proceedings and make an award while the challenge procedure is pending. 31 Ibid.

Appointment of substitute arbitrators

4.2.5  If the mandate of an arbitrator is terminated, a substitute arbitrator shall be appointed in accordance with the appointment provisions of the SAL. 32 Ibid, art 26.

4.3.1 The SAL does not contain a chapter specifically dedicated to the responsibilities of arbitrators. However, it prescribes that an arbitrator must have the qualities agreed upon by the parties and be impartial and independent in relation to the parties and the subject matter of the dispute. 33 Ibid, art 19. Furthermore, the proposed arbitrator has a duty to disclose any circumstances that may justifiably raise doubts as to their impartiality or independence before accepting the appointment. 34 Ibid, art 21.  If such circumstances occur after the appointment, the arbitrator shall without delay disclose the circumstances to the parties. 35 Ibid.  The SAL also provides that an arbitrator shall perform all duties conscientiously and efficiently. 36 Ibid, art 22.

4.3.2 Additionally, there are various other legislative acts in Serbia setting out principles and responsibilities that should be followed by arbitrators in the same way as state court judges.

4.3.3 According to the Constitution of the Republic of Serbia, there is an obligation for judges and arbitrators to perform their duties in accordance with the Constitution and Laws of Serbia and, where stipulated, in accordance with generally accepted rules of international law and ratified international treaties. 37 Constitution of the Republic of Serbia (2006), art 142.

4.3.4  Finally, the PA Rules contain provisions regulating the conduct of the proceedings and the rulings that arbitrators can make in relation to procedural matters, such as deciding on whether a party should be required to deposit an advance to cover the costs of experts and witnesses, securing evidence, time limits, joining cases, and other rulings that are deemed to be necessary. 38 PA Rules, art 35.  Similar duties are set in the BAC Rules in a more general manner. Namely, BAC Rules state that the arbitral tribunal may conduct the proceedings in any manner it considers appropriate, ensuring equal treatment of the parties and affording each party a reasonable opportunity to present its case and the evidence supporting it, at the appropriate stage of the proceedings. Further to that, BAC Rules state that in exercising its discretion, the arbitral tribunal conducts the proceedings so as to avoid unnecessary delay and expense and to provide a fair and efficient process for resolving the parties’ dispute. 39 BAC Rules, art. 29.

Costs of arbitration

4.4.1 Pursuant to the SAL, the parties are to bear the costs of arbitration. The amount of, and responsibility for, costs shall be determined by the arbitral tribunal. 40 Serbian Arbitration Law, art 18.  The arbitral tribunal may request the parties to pay the costs in advance. 41 Ibid.  Furthermore, the permanent arbitral institution shall independently establish the costs of arbitration and the scale of such costs. 42 Ibid.

Arbitrator’s fees

4.4.2 The PA Rules provide that the fees of the arbitrators, as well as the fees of the Chair, Vice-Chairmen and members of the Board of the Court of Arbitration, shall be determined by a decision of the competent authority of the Serbian Chamber of Commerce. 43 FCA Rules, art 56.  After the award is made or a settlement is reached or proceedings are terminated, the Chair of the Court of Arbitration shall fix the arbitrators’ fees, in accordance with the above mentioned decision. 44 Ibid.  Additionally, the PA Rules provide that foreign arbitrators are entitled to their fees in foreign currency. 45 Ibid.

4.4.3  According to the BAC Rules, the amount of administrative fees and arbitrators’ fees shall be determined by the Secretariat in accordance with the Schedule of Costs of the BAC. The parties shall advance the administrative fees and arbitrators’ fees in accordance with Secretariat’s instructions. As a rule, the Secretariat shall instruct the claimant and the respondent each to advance one half of such fees. The BAC Rules provide that the Secretariat of BAC shall determine the distribution of the sum allocated for arbitrators’ fees among the members of a three-member arbitral panel (BAC Rules, Art. 44).

4.5.1 The Serbian Constitution and the SAL do not contain any specific provisions regarding arbitrator immunity.

5.1.1 The SAL provides that the arbitral tribunal is competent to decide on its own jurisdiction (the principle of competence-competence). 46 Serbian Arbitration Law, art 28 reflecting the wording in the Model Law (1985), art 16 (see full text in http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf).  A decision by an arbitral tribunal that the contract containing an arbitration clause is null and void will not invalidate the effect of the arbitration clause.

5.2.1 Unless otherwise agreed by the parties, the arbitral tribunal may order interim measures upon the request of a party. The requesting party may be required to provide security in appropriate circumstances. 47 Serbian Arbitration Law, art 31.

6.1.1 Unlike the UNCITRAL Model Law (1985), the SAL distinguishes between institutional and ad hoc arbitral proceedings when providing for the date of commencement of arbitral proceedings.

6.1.2 In institutional arbitral proceedings, the arbitration shall  commence  on  the  day  that the arbitral institution receives the request for arbitration or a statement of claim. 48 Ibid, art 38.  However, in ad hoc arbitral proceedings the arbitration shall commence on the day that the respondent receives the request for arbitration or a statement of claim together with a notification that  the  claimant  has  appointed  an  arbitrator and the invitation to the opposing party to appoint its arbitrator or,  alternatively, has proposed a sole arbitrator and requested  that  the  opposing  party  state  whether it agrees to the proposed sole arbitrator. 49 Ibid.  

6.2.1 Parties to an arbitration agreement are free to agree on the procedural rules to be followed by the arbitral tribunal. 50 Ibid, art 32.  If the arbitration is international, the parties may agree that foreign law shall be applied to the arbitral proceedings in accordance  with the provisions of the SAL. If the parties fail to agree on what procedural rules are to apply, the arbitral tribunal may conduct the arbitral proceedings in such a manner as it considers appropriate in accordance with the provisions of the SAL. 51 Ibid.

6.2.2  The SAL provides that the fundamental principles of the arbitral proceedings are the equal treatment of the parties, party autonomy and due process.

6.2.3 Under the SAL, a party waives its right to object to a derogation of any requirement stipulated in the arbitration agreement where it is aware of the derogation and yet continues to participate in the arbitral proceedings without raising an objection. 52  Ibid, art 43.

6.3.1 Parties are free to agree on the seat of arbitration. If the parties have entrusted the administration of their arbitral proceedings to an arbitral institution, the seat of arbitration shall be determined in accordance with its rules. 53 Ibid art 34.  If the parties fail to determine the seat of arbitration, the arbitral tribunal should determine the seat of arbitration. 54 Ibid.  

6.3.2  Unless otherwise agreed by the parties, the arbitral tribunal may meet at any place it considers appropriate, which need not be the seat of arbitration, for the deliberations of the arbitral tribunal, the hearing of witnesses, experts or the parties, as well as for the inspection of goods, other property or documents. 55 Ibid.

6.3.3 Pursuant to the SAL, the parties may agree on the language of the arbitral proceedings. If the parties fail to agree on the language of the arbitration, the arbitral tribunal shall determine the appropriate language, taking into account the seat of arbitration and the language used by the parties in their legal relationship. 56 Ibid, art 35.

6.3.4  Until the language of the arbitration is determined, the statement of claim, the statement of defence and any other written submissions may be submitted in the language of the contract, the language of the arbitration agreement or in the Serbian language. 57 Ibid.  

6.4.1  Article 36 of the SAL sets out the definitions of the statement of claim and the statement of defence. The SAL provides that, unless otherwise agreed by the parties, the claimant shall state in its statement of claim the facts supporting its claim, the issues in dispute and the relief or remedy sought.

6.4.2  The respondent shall, unless otherwise agreed by the parties and within the time limit agreed upon by the parties or as determined by the arbitral tribunal, state its defence to the claims, statements and evidence contained in the statement of claim.

6.4.3 The parties may, during the course of the arbitral proceedings, amend or supplement their statement of claim or statement of defence, unless they agree otherwise or unless the arbitral tribunal decides that to allow such amendments would jeopardise the efficiency of the arbitral proceedings. 58 Ibid, art 36.

6.4.4 Unlike the UNCITRAL Model Law (1985), the SAL contains specific provisions on counterclaims. A counterclaim may be submitted by the respondent with the statement of defence, unless the parties agree otherwise. 59 Ibid, art 37.

6.5.1 According to PA Rules, when the parties have submitted to the arbitration multiple statements of claim against each other which arise out of the same or different legal relationships, the Secretariat of the PA shall seek to join the proceedings concerning these claims and to have them decided by the same arbitral tribunal, for the purpose of efficiency of proceedings. 60 PA Rules, art 29.  A similar rule is stipulated by the BAC Rules (art. 23).

6.5.2 As to the third-party intervention, PA Rules provide that a person that has a legal interest to participate in the arbitral proceedings may join one of the parties only with the consent of both parties, under the conditions and in the manner determined by the arbitral tribunal or the sole arbitrator. 61 PA Rules, art 36  A similar rule is stipulated by the BAC Rules. 62 BAC Rules, art 30  

6.6.1 Parties may choose to have oral hearings or arbitrations based on written submissions only. 63 Serbian Arbitration Law, art 39.  If the parties fail to agree, the arbitral tribunal shall decide whether to hold an oral hearing or whether to conduct the arbitral proceedings on the basis of documents and written materials only. If one of the parties requests a hearing, the arbitral tribunal shall hold such a hearing unless the parties have previously agreed otherwise. 64 Ibid, art 39.  

6.6.2 The arbitral tribunal is required to notify the parties in a timely fashion of any hearings or meetings of the arbitral tribunal for the purposes of inspection of goods, other property or documents. 65 Ibid, art 40.  All statements, documents and other evidence (including any expert reports) that are supplied to the arbitral tribunal by one party shall be communicated to the other party. 66 Ibid.

6.6.3  As a rule, witnesses shall be examined at a hearing. Witnesses may also be examined outside the hearing if they so agree and if the parties do not object. 67 Ibid, art 44.  

6.7.1 Article 42 of the SAL addresses issues that may arise if there is a default of a party with regard to the arbitral proceedings without a justified cause. If the claimant, after filing the request for arbitration, fails to communicate its statement of claim, the arbitral tribunal shall terminate the arbitral proceedings. 68 Serbian Arbitration Law, art 42.  

6.7.2  If the respondent fails to communicate its statement of defence, the arbitral tribunal shall continue the arbitral proceedings, without treating such default as an admission by the respondent of the allegations and claims contained in the statement of claim. 69 Ibid.  

6.7.3 If a party, although duly summonsed, fails to appear at a hearing or to produce documentary evidence, the arbitral tribunal may continue the arbitral proceedings and render an award based on the evidence that was produced. 70 Ibid.  

6.7.4 The parties are free to agree on different consequences of a default.

6.8.1 Unless otherwise agreed by the parties, the arbitral tribunal may:

• appoint one or more experts to provide reports or opinions on the issues to be determined by the arbitral tribunal; 
• require that the parties provide the expert(s) with any necessary information or documents, or allow them access to documents, goods or other property. 71 Ibid, art 45.  

6.8.2  Unless otherwise agreed by the parties, if a party so requests or if the arbitral tribunal so determines, the tribunal-appointed expert(s) shall, after delivery of their written or verbal report and opinion, participate in an oral hearing.  At such hearing, the parties may put questions to them or present other experts to discuss the issues in dispute with the appointed expert.

6.8.3 The provisions of the SAL regarding the challenge of arbitrators are similarly applied to the challenge of experts. 72 Ibid.

6.9.1 Under the PA Rules, arbitral proceedings are held in private, unless the parties have agreed otherwise. 73 PA Rules, art 32 and BAC Rules, art 24.  

6.9.2 The full text of the award may be published only with the consent of the parties. However, the Chair of the PA is permitted to authorise the publication of the award in professional periodicals without disclosing the names of the parties or any information that may be damaging to the interests of the parties. 74 PA Rules, art 51.  

6.9.3 Unlike PA Rules, BAC Rules provide that unless a party requests in writing within 60 days from the day of delivery of the award that it is not published, the BAC shall be authorized to publish awards or their summaries, excising any data that might enable the identification of the parties to the proceedings. 

6.10.1 If the arbitral tribunal considers that it requires assistance in taking evidence, or upon a request of a party, it is entitled to request such assistance from the Serbian courts in taking evidence. If it does so, the arbitral tribunal will consider any evidence heard before the Serbian court as evidence heard by itself. 75 Serbian Arbitration Law, art 46.

7.1.1 The parties are free to choose the law governing the dispute. 76 Ibid, art 50.  The SAL provides that the designation of the law of a given state shall be construed, unless otherwise expressly agreed by the parties, as a direct reference to the substantive law of that state and not to its conflict of law rules. 77 Ibid. Should the parties fail to reach an agreement on the applicable law, the arbitral tribunal, in an international arbitration, shall determine the applicable law or body of rules on the basis of the conflict of law rules it deems appropriate. 78 Ibid.  If the parties expressly agree, the arbitral tribunal may decide the dispute ex aequo et bono. 79 Ibid, art 49.

7.2.1 The SAL provides that an award can be rendered as a final award, an interim award or a partial award. 80 Ibid, art 48.  Unless otherwise agreed by the parties, an award shall be made after deliberations in which all the arbitrators must participate.

7.2.2 Unlike the UNCITRAL Model Law (1985), which neither requires nor prohibits dissenting opinions, the SAL provides that an arbitrator who disagrees with the award may write a dissenting opinion which shall be communicated to the parties along with the award if the dissenting arbitrator so requests. 81 Ibid, art 52.

7.3.1 In order to be valid, an award shall be made in writing and signed by the majority of the arbitral tribunal. 82 Ibid, art 51.  An award should comprise an introduction, a decision on the subject matter of the dispute and on the costs of arbitration and a statement of reasons, unless the parties have agreed to exclude reasons. The award must state the date and place of its rendering. 83 Ibid, art 53.

7.3.2 According to PA Rules, the final award shall be made within 30 days of the date of the last hearing or the date on which the last meeting of the arbitral tribunal was held. 84 PA Rules, art 43.

7.3.3 The arbitral institution that administers the arbitration shall notify the award to the parties in accordance with its rules. In ad hoc arbitration, the award shall be notified to the parties by the arbitral tribunal. In either case, the award may, on the joint request of the parties, be deposited with the court at the seat of arbitration. 85 Serbian Arbitration Law, art 55.

7.3.4 At the request of a party, submitted no later than 30 days after the date of receipt  of the award, the arbitral tribunal shall correct any language or technical errors in the award, provide specific interpretations of points contained  in  the  award  or  make a supplementary award on any claims raised in the arbitral proceedings that were not decided in the award. 86 Ibid, art 56.

7.4.1  If the parties settle the dispute during the arbitral proceedings, the arbitral tribunal shall, at the request of the parties, render the award on agreed terms, unless the effects of the settlement are contrary to public policy. 87 Ibid, art 54.  An award on agreed terms has the same legal effect as any other award (i.e. it will be an enforceable document), except that it does not have to contain a statement of reasons. 88 Ibid, art 54.

7.5.1 The parties shall bear the costs of the arbitration in the amounts determined by the arbitral tribunal. If the arbitral tribunal so requests, the parties shall pay the costs in advance. When an arbitral institution conducts the arbitral proceedings, it shall independently establish the costs of the arbitration and the scale of these costs. 89 Ibid, art 18.

7.5.2 Provisions relating to the award of interest can be found in the law applicable to the subject matter of the dispute. For example, according to the Law on Contracts and Torts, a debtor who is late in performing a pecuniary obligation shall owe default interest, in addition to the principal sum. 90 Law on Obligations, 1 October 1978 (as amended), art 277.  Furthermore, a creditor is entitled to default interest regardless of whether he has sustained loss due to the debtor’s delay. In the event that the loss sustained by the creditor due to the debtor’s delay is higher than the amount payable by way of default interest, the creditor is entitled to the additional amount. 91 Ibid, art 278

7.6.1 The rendering of the final award shall terminate the arbitral proceedings. The arbitral proceedings may also be terminated if:

• the claimant withdraws its claim, unless the respondent objects and the arbitral tribunal finds that the respondent has a legitimate interest in obtaining a final award;
• the parties agree on the termination of the arbitral proceedings;
• the arbitral tribunal finds that the continuation of the arbitral proceedings has become impossible; or
• the arbitral proceedings have been suspended in accordance with the SAL. 92  Serbian Arbitration Law, art 47.

7.7.1 A domestic award has the same effect between the parties as a final judgment of the domestic court. 93 Ibid, art 64.

7.7.2  A foreign award has the same effect between the parties as a final judgment of the domestic court after being recognised by the competent Serbian court. 94 Ibid.

7.7.3  A foreign award is an award either made by an arbitral tribunal, the place of which is outside the Republic of Serbia, or an award made by an arbitral tribunal in the Republic of Serbia where a foreign law was applied to the arbitral proceedings. 95 Ibid.  

7.8.1  At the request of any party, submitted no later than 30 days from the date of receipt of the award, the arbitral tribunal shall:

• correct the language and any technical errors in the award or provide specific interpretations of the award; or
• render a supplementary award as to claims presented in the arbitral proceedings but not decided in the award. 96  Ibid, art 56.  

8.1.1  A state court only has jurisdiction over arbitration in matters expressly specified in the SAL. 97 Ibid, art 7.  For example, each party may, before or during arbitral proceedings, request that the court grants interim measures. 98 Ibid, art 15.

8.1.2 The court also has a role in the appointment of arbitrators. If the parties fail to determine the number of arbitrators where there is no appointing authority, or the appointing authority also fails to make a decision, the number of arbitrators shall be determined by the competent court. 99 Ibid, art 16.  Additionally, where the dispute is  to be resolved by a sole arbitrator, and the parties fail to agree on the appointment within 30 days of the date that one party requests the other to jointly appoint the arbitrator and there is no appointing authority, or the  appointing  authority  also fails to appoint the sole arbitrator, the appointment shall be made by the competent court. 100 Ibid, art 17.

8.1.3  In ad hoc arbitration, if a party considers that an arbitrator has become unable to perform the arbitrator’s functions or has failed to act without undue delay, that party may request the competent court to terminate the arbitrator’s mandate. The decision of the court on this subject matter is not subject to appeal. 101 Ibid, art 25.

8.1.4 If the arbitral tribunal rules on pleas with regards to its own jurisdiction, including any objection to the existence or validity of the arbitration agreement, any party may request, within 30 days after receiving the ruling, the competent court to decide on the matter. 102 Ibid, art 30.

8.1.5 The arbitral tribunal may also request the court’s assistance in taking evidence. If it does so, the arbitral tribunal shall regard the evidence taken before the court as evidence taken by the arbitral tribunal itself. 103 Ibid, art 46.

8.1.6  In making an application for setting aside an arbitral award, the court at the seat of arbitration has the territorial jurisdiction to decide upon the application. 104 Ibid, art 57.   When considering the recognition and enforcement of a foreign award, the court determined by the statute shall make this decision. Territorial jurisdiction will belong to the court in whose territory the award will be enforced. 105 Ibid, art 65.

8.2.1 Under the SAL, a Serbian court, upon the motion of a party submitted prior to submissions on the subject matter of the dispute, will dismiss an action for lack of jurisdiction if the dispute is subject to an arbitration agreement. 106 Ibid, art 14.  This is the position unless the court finds that the arbitration agreement is manifestly null and void, inoperative or incapable of being performed.

8.3.1 The SAL provides the courts with no powers to make preliminary rulings on the jurisdiction of an arbitral tribunal.

8.4.1 The SAL provides that each party is entitled, before or during arbitral proceedings, to request interim measures from the Serbian courts. 107  Ibid, art 15. This provision also applies when the seat of the arbitration is in another state.

9.1.1 An application to set aside an award may only be made in relation to a domestic award. A domestic award is defined as an award made in the Republic of Serbia in either domestic or international arbitration. The Serbian court at the seat of arbitration is the competent court to decide on the procedure for setting aside an award. The parties cannot waive the right to apply to set aside an award. 108 Ibid, art 62.

9.2.1 The deadline for making an application to set aside an award is three months after the award was received by the party making the application, or three months from the date on which the decision on the request for a correction, interpretation or supplemental award was communicated to the parties.

9.2.2 An award can only be set aside if the applicant proves that:

• the arbitration agreement is invalid under the law determined by the parties’ agreement or under Serbian law;
• the party against whom the award was made was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was otherwise unable to present its case;
• the award deals with a dispute not falling under the arbitration agreement or contains decisions on matters beyond the scope of that agreement (although, if it is found that the part of the award going beyond the scope of the arbitration agreement can be severed from the remaining part of the award, only the former part of the award will be set aside);
• the composition of the arbitral tribunal or the conduct of the arbitral proceedings was not in accordance with the arbitration agreement or the rules of the arbitral institution that was entrusted with administration of the arbitration, or if such agreement was in conflict with a mandatory provision of the SAL;
• no agreement regarding the composition of the arbitral tribunal was made, the composition of the arbitral tribunal or the conduct of the arbitral proceedings was not in accordance with the provisions of the SAL; or
• the award was based on the false testimony of a witness or expert or a forged document, or the award results from the criminal act of an arbitrator or a party, if these grounds are proven by a final judgment. 109 Ibid, art 58.

9.2.3  The Serbian court shall also set aside the award if it finds that:

• the subject matter of the dispute is not eligible for settlement by arbitration under  Serbian  law; or
• the award is contrary to Serbian public policy. 

9.2.4  The SAL, like the UNCITRAL Model Law (1985),  leaves  it  to  the  Serbian court before which the application to set aside was filed, to decide whether or not to suspend the arbitral proceedings in order to provide the arbitral tribunal with an opportunity to take such actions which, in the arbitral tribunal’s opinion, will  eliminate  the  grounds  for  setting aside. 110 Ibid, art 60.

9.2.5  If the Serbian court sets aside the award on grounds not relating to the existence and/or validity of the arbitration agreement, that agreement shall continue to bind the parties and the dispute shall be re-submitted to arbitration, unless the parties agree otherwise. 111 Ibid, art 63.

9.3.1  The SAL does not contain provisions regulating appeals against an award. The only way to challenge the final arbitration award is to submit an application for setting aside the award.

General provisions

10.1.1 The SAL regulates the issue of recognition and enforcement of foreign awards. 112 Ibid, art 64–68.  The provisions are based on the New York Convention, to which Serbia is a signatory 113 For the text of the New York Convention, see https://www.uncitral.org/pdf/english/texts/arbitration/NY-conv/New-York-Convention-E.pdf.   and the UNCITRAL Model Law (1985). However, it should be noted that when ratifying the New York Convention, the Serbian Government expressly declared that: 

• the Serbian courts will only recognise and enforce awards rendered in other states that are party to the Convention; and
• the Serbian courts will only recognise and enforce awards relating to disputes that qualify as “commercial” under Serbian law. 

10.1.2  The Serbian court may decide on the recognition of a foreign award as a preliminary matter in the enforcement proceedings.

Grounds for refusing recognition and enforcement

10.1.3  Recognition and enforcement of a foreign award may be refused, at the request of the party against whom it is invoked, if that party proves that:

• the arbitration agreement is invalid under the law determined by the parties’ agreement or under the law of the country where the award was rendered;
• the party against whom the award had been rendered was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was otherwise unable to present their case;
• the award deals with a dispute not falling under the arbitration agreement or contains decisions on matters beyond the scope of that agreement (although, if it is found that the part of the award going beyond the scope of arbitration agreement can be severed from the remaining part of the award, partial refusal of the recognition and enforcement of that award will be possible);
• the composition of the arbitral tribunal or the conduct of the arbitral proceedings were not in accordance with the arbitration agreement or, in the absence of such an agreement, were not in accordance with the law of the country where the arbitration took place; or
• the award has not yet become binding on the parties or has been set aside or suspended by a court of the country in which, or under the law of which, that award was made. 114  Serbian Arbitration Law, art 65 which reflects the grounds set out in the Model Law (1985), art 36(1) (see full text in http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf).

10.1.4  The competent Serbian court will also refuse recognition and enforcement of the award if it finds that:

• the subject matter of the dispute is not eligible for settlement by arbitration under Serbian  law; or
• the award is contrary to Serbian public policy. 

Jurisdiction of the Serbian courts in the recognition and declaration of enforceability of a foreign award

10.1.5  The Serbian court with territorial jurisdiction to hear applications for the recognition and enforcement of foreign awards is the Serbian court in the territory in which enforcement of the award is sought. 115 Serbian Arbitration Law, art 65.

10.1.6  The Law on Organisation of Courts designates the Serbian Higher and Commercial Courts as the competent courts to decide on the recognition and enforcement of foreign awards. 116 Law on Organisation of Courts, 27 December 2008 (as amended), art 23 and 25  

Effects of an application in another country to set aside an award

10.1.7 The SAL includes provisions on the effects of an application to set aside an award, where the application has been initiated abroad. The Serbian court before which recognition and enforcement of a foreign award is sought, may, if it considers it necessary, adjourn its decision if proceedings for setting aside an award or suspending enforcement of an award have been initiated in the state in which, or under the laws of which, the award was rendered. 117 Serbian Arbitration Law, art 67.  The same provisions apply regardless of whether the country in which the application to set aside is being made is a signatory to the New York Convention.

10.1.8  The Serbian court before which recognition and enforcement of a foreign award is sought, may, at the request of a party, require that its decision regarding the recognition and enforcement proceedings be conditional upon provision of the appropriate security by the party opposing enforcement.