Litigation in Bosnia and Herzegovina

Few countries have more syllables in their names than Bosnia and Herzegovina. And while the country dates back to the ninth century, the government is just twenty years old. It is home to three and a half million people. It is also no stranger to conflict. It was the site of a war in the mid 1990s and its presidency is shared by members of three major ethnic groups. And, of course, it has commercial disputes. To learn about the last type of conflict, I was fortunate enough to speak with Branko Marić, a senior partner at Marić & Co. in Sarajevo.

Why should you continue reading this post about litigation in Bosnia and Herzegovina?

• You want to read about both Bosnia and Herzegovina, but only want to read one webpage.

• You are pretty sure you know what country Sarajevo is in but you want to make sure.

• You want to read about a European common law jurisdiction that isn’t the UK or Ireland.

Branko Marić is the managing partner of Marić & Co. in Sarajevo. This interview has been lightly edited.

Can you tell me about the kinds of disputes you handle in your legal practice? 

The law firm is specialized in the sense that its lawyers that specialize in a specific area of law also handle litigation proceedings in that area.

Additionally, the firm has lawyers who specialize exclusively in litigation.

Therefore, in line with a client’s ongoing needs, a team is typically formed to address specific legal matters.

Within the law firm, I am currently most involved in banking and finance as well as tax disputes.  In principle, I handle all types of tax disputes for various clients if the complexity of the case and the disputed tax amount are significant enough to require my involvement.

As an illustration, I can mention that the Constitutional Court of Bosnia and Herzegovina engaged in a discussion on tax matters for the first time upon my appeal (previously, it had been rejecting to even hear tax cases rationae materie), and it ruled in favor of my client.

I also handle all kinds of disputes in which banks are being sued. Banks are popular targets of lawsuits for various reasons. There have been series of lawsuits against banks related to Swiss franc loans, claims for the reimbursement of loan processing fees and disputes over the calculation of default interest during execution proceedings on their clients' accounts, and other basis. In addition to these series of lawsuits, there have been individual lawsuits for breach of contract, compensation for damages due to computer system breaches, mishandling of promissory notes, and similar issues. Banks usually have their own cheaper lawyers for debt collection and simpler disputes, and they turn to me when they have a real problem.

I personally take pride in these successes. Although similar cases have arisen in neighboring Croatia and Serbia, it is only in Bosnia and Herzegovina that banks, thanks to the legal interpretations I had made, came out unscathed and won all these disputes.

What type of clients do you generally represent in disputes?

My clients in legal proceedings are predominantly banks.

In my practice so far, I have worked for almost all foreign-owned banks in Bosnia and Herzegovina. Currently, I am working on a significant tax issue for all of these banks (except one with which I have a conflict with). Specifically, the Indirect Tax Administration is attempting to collect VAT on services provided by foreign credit card organizations from all banks, even though it did not collect it previously and there has been no change to justify this action.

Furthermore, I have represented all forms of companies in tax-related disputes, from large privately or publicly-owned companies and banks to small businesses.

Besides Microsoft Office, what software do you use in your practice? 

We use just Microsoft Office and do not feel the necessity to use anything else.

What books and websites do you use for legal research? 

I mostly use court practice databases that exist on the level of second-instance courts, supreme and constitutional courts. Here are three: https://sudskapraksa.pravosudje.ba/search?collection=STAV&q= and https://www.ustavnisud.ba/bs/praksa-ustavnog-suda-bih and https://www.ustavnisud.ba/bs/odluke?sp=DatumDesc&.

One problem, however, is that I mainly handle cases with specific subject matter for which court practice is yet to be established.

Image credit: https://en.wikipedia.org/wiki/Constitutional_Court_of_Bosnia_and_Herzegovina#/media/File:Predsjedništvo_BiH_(2989421535).jpg

Do you electronically file pleadings with the court?  Or must you send paper copies of them to the courthouse?

Unfortunately all court submissions still need to be hard copied.

Within Bosnia and Herzegovina is the Republika Srpska.  Does that entity have its own system for commercial dispute resolution? 

The judicial systems in both political entities (the Federation of Bosnia and Herzegovina and Republika Srpska) are almost completely separate because we are one of the few countries where a supreme court at the state level does not exist. Instead, we have the Supreme Court of Republika Srpska and the Supreme Court of the Federation of Bosnia and Herzegovina.

To make the situation even more complicated, for commercial disputes involving the state or one of its institutions, the Court of Bosnia and Herzegovina has jurisdiction. That court is consisted of first-instance, second-instance, and revision chambers. 

How is the Bosnia and Herzegovina Supreme Court different from other courts in the country? 

Because of the very unique situation involving the two entities, the Constitutional court of B&H has appellate jurisdiction and in a way, it conducts that function instead of the state-level supreme court.

Do commercial cases ever go to the Constitutional Court of Bosnia and Herzegovina?  If so, why does that court have judges who come from outside of the country?

Commercial cases may be heard in front of the Constitutional Court of Bosnia and Herzegovina under the same conditions as any other disputes, provided that the formal requirements are met.

This means that all legal remedies within the regular courts must be exhausted and that a certain right protected by the Constitution of Bosnia and Herzegovina or the European Convention on Human Rights is violated.

The presence of foreign judges is a relic of the time when the Dayton Agreement was signed and the Constitution of Bosnia and Herzegovina was adopted as its integral part. Given the inter-ethnic conflicts that existed at the time, the purpose of international judges was to create a balance and prevent the enactment of decisions based on national grounds. Specifically, in situations where judges are appointed in pairs representing Serbs, Croats, and Bosniaks, it was believed that three international judges would ensure that decisions would not be made to the detriment of any of the three nationalities in Bosnia and Herzegovina. However, when it comes to resolving commercial disputes, a so-called panel of three judges decides, and international judges do not necessarily need to participate in its proceedings.

Does Bosnia and Herzegovina have specialized courts that only hear commercial cases? 

The situation is different in the two political entities in Bosnia and Herzegovina.

In Republika Srpska, there are specialized commercial courts, so in the first instance, cases are heard by district commercial courts, and in the second instance, by higher commercial courts.

In the Federation of Bosnia and Herzegovina, there are only specialized departments for commercial disputes within municipal courts. However, in essence, there is not a significant difference in the proceedings or the speed of court action and the entire process is quite slow.

There are three official languages in Bosnia and Herzegovina.  How do courts handle arguments involving speakers of those languages?  What language do the courts publish decisions in?

In essence, the language problem does not exist because, contrary to political dogmas, one language is in essence spoken in Bosnia and Herzegovina.

For example, when citizens of Sarajevo talk to each other, a Bosniak, Croat, and Serb, there is absolutely no language difference, and a Bosniak may refer to it as Bosnian, a Serb as Serbian, and a Croat as Croatian. Therefore, legal proceedings are conducted in this language, and judgments are written in it, without specifying the language in which the judgment was rendered.

To add a bit of humor, the residents of Bosnia and Herzegovina are the greatest polyglots because each of them naturally speaks three languages from birth.

Who decides the facts in a commercial case?  Is it a judge or a jury? 

Individual judge decides the first-instance cases, whereas a panel of three judges decide appeals.

A jury consisted of citizens does not exist in our legal system.

Generally speaking, how many pages are the complaints or initial pleadings you see in your work?

When drafting lawsuits, I strive to keep them as concise, clear, and succinct as possible, as it is essential to convey the story in a way that the judge can understand without excessive legal verbosity.

When considering the complexity of the matter, I believe that three pages are often sufficient to present everything needed to introduce the case to the court. However, sometimes, depending on the volume of facts to be addressed and the complexity of the legal issues involved, even ten pages may not be enough.

Generally speaking, how long does it take for a case to go from complaint to judgment?

This largely depends on the court handling a particular case.

For instance, in simpler cases, a first-instance judgment can be obtained within a year from filing the lawsuit. But there are also more complex cases, such as construction disputes, where I may not receive a judgment even after 10 years. However, the issue is that in some courts, the appellate process is really long and it may take up to 3-4 years before a case even enters the resolving procedure.

Generally speaking, how is evidence exchanged between the parties before trial?  Do you get to interview the opposing witnesses before the trial?

Essentially, before initiating a lawsuit, there is no exchange of evidence.

The plaintiff has an obligation to propose the evidence they intend to present in the proceeding within their complaint. If the said pieces of evidence are written documents, they should be attached to the complaint. Such a complaint is then served to the defendant, who, in their response, lists and attaches their own evidence.

During a lawsuit, there is no exchange either. The claimant has to disclose all the evidences as the attachment of his claim or at the preparatory hearing at the latest, as after that he cannot file any new evidence if he had the possibility to file it before the preparatory hearing. The same is with the defendant who has to disclose his evidences attached to his reply to claim or at the preparatory hearing at the latest.

If you win, does the other side reimburse your attorneys’ fees?

Yes, that's the general rule, and costs are awarded in accordance with a tariff established by one of the two Bar Associations that exist in each entity.

The prescribed costs vary depending on the subject matter of the dispute, with the Bar Association Tariff of the Federation of Bosnia and Herzegovina setting significantly higher fees for representation compared to the Tariff of Republika Srpska. However, clients in the Federation of Bosnia and Herzegovina may face issues because courts in the Federation cannot always award costs according to that tariff, as it is limited to the average net salary in the Federation of Bosnia and Herzegovina for a single legal action by an attorney.

Are the courts open to the public?  Can ordinary people watch a commercial trial?

In principle, all proceedings are public, but each of the parties involved in the lawsuit may request that the public be excluded.

In practice, this almost never happens because there is usually no interest in attending commercial court hearings.

Do you believe that courts in Bosnia and Herzegovina have a particular strength for resolving commercial disputes?  How about a weakness?  What are they? 

Unfortunately, being honest, I cannot think of a strength.

As for a weakness, there is always a problem because a certain number of cases emerge where it is necessary to deal with a specific matter that has not previously been dealt with by our courts at all. This type of commercial dispute requires increasingly specialized knowledge from the judge, and a lack of understanding of the specifics of the matter can lead to issues and incorrect decisions.

Another problem is that commercial cases are resolved very slowly, and it usually takes a minimum of 3-4 years for a case to be concluded.

How often do you go to the courthouse? 

I usually go to court 2 to 3 times a week, which is sufficient for the cases I handle.

When you are there, do you need to wear a special robe or wig?

On such occasions, I do not wear any special attire or a wig, as there are no regulations prescribing a formal dress code for civil cases. Criminal cases are the exception where a special robe is mandatory.