The law of arbitration in Serbia is contained in a single act – the Arbitration Act enacted in 2006. The Arbitration Act was adopted in a process of legal reform in Serbia in order to promote arbitration as the common way of settling commercial disputes. The new act summarises the provisions related to arbitral proceedings that were once contained in the Law on Civil Procedure and the Serbian Act on Conflict of Laws. However, the new Arbitration Act is based on the UNCITRAL Model Law on International Commercial Arbitration and regulates arbitration comprehensively.

The first arbitral institution in Serbia was the Foreign Trade Court of Arbitration at the Serbian Chamber of Commerce (hereinafter “FCA”), which was established in 1947. It is an international arbitral institution, acting independently from the association at which it was established.

The current Rules of the FCA, published on 8 June 2007 in the Official Gazette of the Republic of Serbia No. 52/07, provide for both conciliation and arbitration as a way of settling disputes before the FCA. They contain modern solutions recommended by international arbitration experts and practitioners, such as that the parties may stipulate the applicability of the Arbitration Rules of UNCITRAL (United Nations Commission on International Trade Law) to the proceedings before the FCA.

Scope of application
The provisions of the Arbitration Act apply to both domestic and international arbitration if the place of arbitration is in the territory of the Republic of Serbia.

The definition of international arbitration set out in Article 3 of the Arbitration Act is in line with the definition laid down in Article 1 (3) of the UNCITRAL Model Law. However, the parties to international arbitration are free to agree otherwise.

The structure of the law
The Arbitration Act is structured on the basis of the UNCITRAL Model Law. The First Chapter contains general provisions, e.g. the scope of application and disputes eligible for arbitration or international arbitration. The Second Chapter deals with the arbitration agreement itself, the Third Chapter deals with the setting up of the arbitral tribunal, the Fourth Chapter contains provisions about arbitrators, and the Fifth Chapter about jurisdiction. The Sixth and Seventh Chapters set out the provisions relating to the conduct of proceedings and the rendering of the award; the Eighth Chapter deals with setting aside an award. The Ninth Chapter deals with recognition and enforcement of foreign awards.

General principles
The underlying general principles of Serbian arbitration law are:

• equality: all parties must be treated fairly and equally (Article 33 Arbitration Act);
• party autonomy: the parties enjoy great autonomy. The mandatory provisions of the Arbitration Act must, however, be observed; and
• due process: all parties must have the opportunity to present their case and evidence, as well as to state their position with respect to acts and proposals of the opposing party.

Definition (Article 9 Arbitration Act)
The Arbitration Act does not contain a definition of an arbitration clause, as set out, for example, in Article 7 (1) of the UNCITRAL Model Law. It provides that an arbitration agreement may be laid down in a contractual clause or in a separate contract. An arbitration agreement may be concluded even after the dispute has arisen.

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

Arbitrability (Article 5 Arbitration Act)
The Arbitration Act defines arbitrable disputes as those which are pecuniary disputes concerning rights of which parties can freely dispose, except for disputes that are reserved to the exclusive jurisdiction of the national courts. Furthermore, the Arbitration Act designates that any natural or legal person (including the State) having the capacity to be a party in civil proceedings may be a party to an arbitration agreement (according to the Civil Procedure Act, every natural and legal person may be a party in civil proceedings).

Certain pecuniary disputes, as stipulated by other relevant laws in Serbia, are not arbitrable since they are under the exclusive jurisdiction of the State Courts. For example, the Serbian Act on Conflict of Laws provides for the exclusive competence of the Serbian courts in several matters, for instance in disputes relating to the ownership of real estate situated in Serbia, leases over real estate in Serbia, claims in family law, etc.

The formal requirements of the agreement (Article 12 Arbitration Act)
The formal requirements of a written arbitration agreement in accordance with Article 12 of the Arbitration Act correspond to those set out in Article 7 (2) of the UNCITRAL Model Law. An arbitration agreement shall be in writing. This formal requirement is fulfilled if an arbitration agreement is either contained in a document signed by the parties or concluded by an exchange of messages through a means of communication which provides a written record of the parties’ agreement, regardless of whether the messages were signed by the parties or not.

Furthermore, an arbitration agreement shall be deemed to exist when the claimant initiates arbitral proceedings in writing, and the respondent in writing or by a statement, recorded in the minutes of the arbitration hearing, expressly accepts the arbitration or fails to challenge the existence of the arbitration agreement or the jurisdiction of the arbitral tribunal before engaging in discussion of the subject matter of the dispute.

Claims before national courts (Articles 14 and 28 Arbitration Act)
As provided in the UNCITRAL Model law, the Arbitration Act stipulates that a court before which an action is brought in relation to a dispute that is the subject of an arbitration agreement shall, upon the motion of a party submitted prior to engaging in discussion of the subject matter of the dispute, dismiss the action for lack of jurisdiction, unless it finds that the arbitration agreement is manifestly null and void, inoperative or incapable of being performed.

The constitution of the arbitral tribunal (Articles 16 and 17 Arbitration Act)
The parties are free to determine the number of arbitrators to conduct the pro­ceedings. An arbitral tribunal shall be composed of one arbitrator (sole arbitrator) or three or more arbitrators. If the arbitration agreement provides for more than one arbitrator, their number must be uneven.

If the parties fail to determine the number of arbitrators, their number shall be determined by a person or institution designated by the parties’ agreement, or 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 court.

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 they fail to reach agreement, the appointment shall be made by the appointing authority, and if there is no appointing authority, or the appointing authority fails to act, the appointment shall be made by the competent court.

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. If the requested party fails to do so, the arbitrator shall be appointed by the appointing authority designated by the parties, and if there is no appointing authority or the appointing authority fails to act, the appointment shall be made by the competent court. The third arbitrator who presides over the arbitral tribunal (hereinafter “president”, or “president of the arbitral tribunal”), shall be elected by the two previously appointed arbitrators within 30 days of the date of their appointment. Should they fail to elect him, the appointment shall be made by the appointing authority, and if there is no appointing authority or the appointing authority fails to act, the appointment shall be made by the competent court. The decision of the court on the appointment of an arbitrator is not subject to appeal.

Grounds for challenging arbitrators (Article 24 Arbitration Act)
The grounds for challenging arbitrators stipulated in the Arbitration Act correspond to those provided in Article 12 of the UNCITRAL Model Law. An arbitrator may be challenged only if circumstances exist that may justifiably raise doubts as to his impartiality or independence or if the arbitrator does not possess the qualities agreed upon by the parties.

Article 24 (2) Arbitration Act provides that an arbitrator may be challenged only if grounds for the challenge have arisen, or the party has become aware of those grounds, after the arbitrator was appointed.

Challenge procedure, early termination of mandate and appointment of a substitute arbitrator (Article 24 Arbitration Act)
A party can submit a request challenging an arbitrator in writing within 15 days of becoming aware of his appointment, or of the grounds for his challenge, unless otherwise agreed by the parties. Parties who have entrusted the organisation of their arbitration to an arbitral institution shall be deemed to have agreed that the challenge be decided in accordance with that institution’s rules.

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

Competence to rule on jurisdiction (Article 28 Arbitration Act)
Article 28 Arbitration Act provides that the arbitral tribunal is competent to decide on its own jurisdiction (“Kompetenz-Kompetenz”). The wording of this provision follows the wording of Article 16 of the UNCITRAL Model Law. The Arbitration Act accepts the doctrine of separability of the arbitration agreement and therefore stipulates that if the arbitration agreement was concluded in the form of an arbitration clause, such clause shall be considered independent from the other terms of the contract. A decision by an arbitral tribunal that the contract containing an arbitration clause is null and void does not entail the invalidity of that clause.

Power to order interim measures (Article 15 and 31 Arbitration Act)
Article 15 Arbitration Act provides that each party is entitled, before or during arbitral proceedings, to request interim measures from a court. This provision also applies when the place of arbitration is in another State.

Furthermore, 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 (Article 31).

General provisions
Parties to the arbitration agreement are free to agree on the procedural rules to be followed by the arbitral tribunal. If the parties do not agree on procedural rules, the arbitral tribunal will conduct the proceedings in accordance with the rules chosen by the parties. If the arbitration is international, the parties may agree that a foreign law shall be applied to the arbitral proceedings, in accordance with the provisions of this Act. If the parties fail to agree on what procedural rules to apply, the tribunal may conduct the arbitral proceedings in such a manner as it considers appropriate, in accordance with provisions of the Arbitration Act.

The fundamental principles of the arbitral proceedings provided in the Arbitration Act are: a) equal treatment of the parties; b) due process.

Place and language of arbitration (Articles 34 and 35 Arbitration Act)
Parties to the arbitral proceedings are free to agree on the place of arbitration. If the parties have entrusted the administration of their proceedings to an arbitral institution, the place of arbitration shall be determined in accordance with its rules. In the case of ad hoc arbitration, parties are free to agree on the place of arbitration. Unless otherwise agreed by the parties, the arbitral tribunal may meet at any place it considers appropriate – whether or not at the place of arbitration– for the deliberations of the arbitrators or for the hearing of witnesses, experts or the parties, as well as for inspection of goods, other property or documents. If the parties fail to determine the place of arbitration, the place of arbitration should be determined by the arbitral tribunal.

The Arbitration Act, as well as the UNCITRAL Model law, leaves it up to the parties to 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 place of arbitration and the language used by the parties in their legal relationship.

In addition to the provisions of Article 22 of the UNCITRAL Model Law which are enacted in Article 34 of the Arbitration Act, the Arbitration Act stipulates that until the language 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.

Statements of case (Articles 36 and 37 Arbitration Act)
Article 36 of the Arbitration Act corresponds to Article 23 of the UNCITRAL Model Law, which includes a definition of the Statement of Claim and the Statement of Defence.

The Arbitration Act 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.

The respondent, for its part, shall, unless otherwise agreed by the parties, 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.

The parties may, during the course of the arbitral proceedings, amend or supplement their Statement of Claim, or Statement of Defence, unless they agreed otherwise or unless the arbitral tribunal decides that to allow such amendments would jeopardise the efficiency of the proceedings.

Unlike in the UNCITRAL Model Law, Article 37 of the Arbitration Act contains specific provisions on counterclaims which may be submitted by the respondent with the Statement of Defence, unless the parties agree otherwise.

Commencement of arbitral proceedings (Article 38 Arbitration Act)
Unlike the UNCITRAL Model Law, the Arbitration Act distinguishes between the commencement of arbitral proceedings in:

1. institutional arbitration proceedings: the Arbitration Act stipulates that the arbitration shall commence on the day that the institution receives a request for arbitration or a Statement of Claim; or
2. ad hoc arbitration proceedings: Serbian law provides that the arbitration shall commence on the day the respondent receives the request for arbitration or a Statement of Claim and a notification that the claimant has appointed an arbitrator or proposed a sole arbitrator and invited the opposing party to appoint their arbitrator or to state their position with respect to the proposed sole arbitrator.

Oral and written proceedings, notice, taking of evidence
(Articles 39, 42, 43 and 44 Arbitration Act)
The Arbitration Act does not restrict the parties in their autonomy to choose between oral hearings and ’document only’ arbitrations. If the parties fail to agree on this matter, the arbitral tribunal shall decide whether to hold a hearing or to conduct the proceedings on the basis of documents and written materials only. Should one of the parties request a hearing, the arbitral tribunal shall hold such a hearing unless the parties have agreed otherwise.

Article 42 Arbitration Act provides that the parties shall be notified in a timely fashion of any hearings or meetings of the arbitral tribunal for the purposes of inspection of goods, other property or documents. All statements, documents and information supplied to the arbitral tribunal by one party shall be communicated to the other party. Any expert report or evidentiary document shall be communicated to the parties.

Article 43 Arbitration Act provides that a right to object shall be lost if a party knows that any requirement arising out of the arbitration agreement was not complied with and yet continues to participate in the arbitral proceedings without raising an objection.

Article 44 Arbitration Act provides that a witness can be orally examined in arbitral proceedings.

Default of a party to observe the arbitral procedure (Article 42)
Article 42 Arbitration Act deals with the issues that may arise if there is a default of a party with regard to the proceedings without a justified cause. If the claimant, after filing the request for arbitration, fails to communicate its Statement of Claim in accordance with Article 36 Para. 2 of the Arbitration Act, the arbitral tribunal shall terminate the proceedings. If the respondent fails to communicate its Statement of Defence in accordance with Article 36 Para. 3 of the Arbitration Act, the arbitral tribunal shall continue the proceedings, without treating such default as an admission by the respondent of the allegations and claims contained in the Statement of Claim. If a party, although duly summonsed, fails to appear at a hearing or to produce documentary evidence, the arbitral tribunal may continue the proceedings and render the award based on the evidence that was produced. The parties are free to agree on different consequences of a default.

Appointment of experts and court assistance (Articles 45 and 46 Arbitration Act)
Unless otherwise agreed by the parties, the arbitral tribunal may: (i) appoint one or more experts to provide reports and opinions on the issues to be determined by the arbitral tribunal; (ii) require parties to provide the expert with any necessary information, documents or allow them access to documents, goods or other property.

Unless otherwise agreed by the parties, if a party so requests or if the arbitral tribunal so determines, the expert(s) shall, after delivery of his/their written or verbal report and opinion, participate in a hearing where the parties may put questions to him/them or present other experts to discuss the points at issue with the appointed expert.

Article 45 Arbitration Act corresponds to Article 26 of the UNCITRAL Model Law, and provides that the provisions of the Arbitration Act regarding the challenge of arbitrators shall be applied similarly to the challenge of experts.

The arbitral tribunal is entitled to request court assistance in taking evidence, and will consider the evidence taken before the court as evidence taken by itself (Article 46 Arbitration Act).

Applicable law (Articles 49 and 50 Arbitration Act)
The parties are free to choose the law governing the dispute. The Arbitration Act 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. 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. If the parties expressly agree, the tribunal may decide ex aequo et bono.

Decisionmaking by the arbitrators (Articles 48, 51 and 52 Arbitration Act)
Article 48 Arbitration Act provides that an arbitral award can be rendered as a final award, an interim award or a partial award. Unless otherwise agreed by the parties, an arbitral award shall be made after deliberations in which all arbitrators must participate. Unlike the UNCITRAL Model Law, which neither requires nor prohibits “dissenting opinions”, the Arbitration Act provides in Article 52 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.

Award on agreed terms (Article 54 Arbitration Act)
Article 54 Arbitration Act deals with the issues that may arise if the parties settle the dispute during the arbitral proceedings. The arbitral tribunal shall, at the request of the parties, render the arbitral award on agreed terms, unless the effects of the settlement are contrary to public policy. An arbitral award on agreed terms shall have the same legal effect as any other award, except that it need not contain a statement of reasons.

The arbitral award and its effect (Articles 51, 53 Arbitration Act)
The award shall be rendered by the majority vote of arbitrators. In order to be valid, an arbitral award shall be made in writing and signed by the majority of arbitrators. Article 53 Arbitration Act provides that an award shall 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.

Termination of proceedings (Article 47 Arbitration Act)
The arbitral proceedings shall be terminated by the rendering of the final award. The proceedings may also be terminated if:

1. the claimant withdraws its claim, unless the respondent objects thereto and the arbitral tribunal finds that the respondent has a legitimate interest in obtaining a final arbitral award on the dispute;
2. the parties agree on the termination of the proceedings;
3. the arbitral tribunal finds that the continuation of the arbitral proceedings has become impossible; or
4. the arbitral proceedings have been suspended in accordance with the Arbitration Act.

Costs (Article 18 Arbitration Act)
According to Article 18, the parties shall bear the costs of the arbitration in the amount determined by the arbitral tribunal. If the tribunal so requests, the parties shall pay the costs in advance. When the proceedings are conducted by an arbitral institution, it shall independently establish the costs of the arbitration and the scale of such costs.

Correction and interpretation of the award (Article 56 Arbitration Act)
At the request of any party, the arbitral tribunal shall: (i) correct the language and technical errors in the award or provide specific interpretations of the award; and (ii) render a supplementary award as to claims presented in the arbitral proceedings but not decided in the arbitral award.

The deadline for filing the abovementioned requests is 30 days of the date of receipt of the award.

An application for setting aside may be made only against a domestic arbitral award, although the term ‘domestic arbitral award’ is defined as an award made in domestic or international arbitration in the Republic of Serbia. The court at the place of arbitration is territorially competent for the procedure of setting aside the award. The parties cannot waive the right to apply to set aside an arbitral award.

Article 58 Arbitration Act provides that an award can only be set aside if the applicant proves that:

1. the arbitration agreement is invalid under the law determined by the parties’ agreement or under the law of the Republic of Serbia;
2. the party against whom the arbitral 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 his case;
3. the award deals with a dispute not falling within the terms of the arbitration agreement or contains decisions on matters beyond the scope of that agreement. 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;
4. the composition of the arbitral tribunal or the arbitral proceedings is not in accordance with the arbitration agreement or with the rules of the arbitral institution that was entrusted with administration of the arbitration, unless such agreement was in conflict with a provision of the Arbitration Act from which the parties cannot derogate, or, failing such agreement, the composition of the arbitral tribunal or the conduct of the arbitral proceedings was not in accordance with the provisions of the Arbitration Act; or
5. the award was based on the false testimony of a witness or expert or on 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.

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

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

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.

The Arbitration Act, like the UNCITRAL Model Law, leaves it to the court before which the application to set aside was filed to decide whether or not to suspend the proceedings for setting aside and give the arbitral tribunal an opportunity to take such actions which, in the arbitral tribunal’s opinion, will eliminate the grounds for setting aside.

If the court sets aside the arbitral award on grounds not relating to the existence and 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.

General provisions
The Arbitration Act regulates the issue of recognition and enforcement of foreign arbitral awards. Provisions on this matter are based on the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards, to which Serbia is a signatory, and the UNCITRAL Model Law on international commercial arbitration. It should be noted, however, that when ratifying the New York Convention, the Serbian Government expressly declared that: (a) Serbian Courts will only recognise and enforce awards rendered in other States that are party to the Convention; and (b) Serbian Courts will only recognise and enforce awards relating to disputes that qualify as “commercial” under Serbian law.

The grounds for refusing recognition and enforcement are in line with the grounds set out in Article 36 (1) of the UNCITRAL Model Law on international commercial arbitration.

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

Grounds for refusing recognition and enforcement (Article 66 Arbitration Act)
Recognition and enforcement of a foreign arbitral award may be refused, at the request of the party against whom it is invoked, if that party proves that:

1. 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;
2. 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;
3. the award deals with a dispute not falling within the terms of the arbitration agreement or contains decisions on matters beyond the scope of that agreement. 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;
4. 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
5. 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.

The competent court shall refuse recognition and enforcement of the award if it finds that:

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

Jurisdiction of the courts in the recognition and declaration of enforceability of a foreign arbitral award (Article 65 Arbitration Act and Articles 22 and 24 of the Law on Organization of Courts)

The court with territorial jurisdiction to hear applications for the recognition and enforcement of foreign awards is the court in the territory in which enforcement of the award is sought (Article 65 Arbitration Act).

Articles 22 and 24 of the Law on Organization of courts designate the district and commercial courts as the courts competent for the recognition and enforcement of foreign arbitral awards respectively.

Effects of an application in another country to set aside an award (Article 67 Arbitration Act)
The Arbitration Act includes provisions on the effects of an application to set aside initiated abroad. In essence, the court before which recognition and enforcement of a foreign arbitral 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.

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

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