Comparative Guides
Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.
Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.
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Results: 4 Answers
International Arbitration
1.
Legal framework
1.1
What is the relevant legislation on arbitration in your jurisdiction? Are there any significant limitations on the scope of the statutory regime – for example, does it govern oral arbitration agreements?
 
Montenegro
The relevant legislation on arbitration is the Montenegrin Arbitration Act, enacted in 2015.

Under Article 9(3) of the Arbitration Act, an arbitration agreement must be in writing. An oral arbitration agreement shall be deemed to have been concluded in writing if:

  • one party sends written notice to the other party referring to a previous oral agreement and the other party fails timely to object to such notice (Article 9(4)(2)); or
  • the claimant initiates an arbitration in writing, based on an oral arbitration agreement, and the respondent fails to object to the tribunal’s jurisdiction before raising issues as to the merits of the case (Article 9(4)(5)).
For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
1.2
Does this legislation differentiate between domestic arbitration and international arbitration? If so, how is each defined?
 
Montenegro
The Arbitration Act differentiates between domestic and international arbitration, as follows (Article 2(1)):

  • An arbitration is deemed to be domestic if the parties are natural persons with their domicile or habitual residence in Montenegro and/or legal persons established under Montenegrin law; and
  • An arbitration is deemed international if it involves a foreign element (ie, if at least one of the parties is a natural person with his or her domicile or habitual residence in another state or a legal person established under a foreign law whose seat is in another state.

However, the difference between these two concepts seems to have lost its practical meaning. The only dichotomy that may be relevant in the current Montenegrin legislation is between domestic and foreign arbitrations in terms of arbitrations with their seat in Montenegro and those seated abroad, respectively.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
1.3
Is the arbitration legislation in your jurisdiction based on the UNCITRAL Model Law on International Commercial Arbitration?
 
Montenegro
Yes, the Arbitration Act is based on the UNCITRAL Model Law on International Commercial Arbitration (as amended in 2006).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
1.4
Are all provisions of the legislation in your jurisdiction mandatory?
 
Montenegro
No, the Arbitration Act allows the parties to agree on certain issues in line with the principle of party autonomy. Therefore, in many respects, the Arbitration Act provides only for default rules in cases where the parties have not agreed otherwise. For example, the parties are free to agree on the procedure for appointment of the arbitral tribunal; it is only if they fail to agree on such procedure that the tribunal will be appointed under the provisions of the Arbitration Act (Article 13(2)).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
1.5
Are there any current plans to amend the arbitration legislation in your jurisdiction?
 
Montenegro
No, the Arbitration Act was enacted only recently (2015) and there are no known plans to amend it at the moment.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
1.6
Is your jurisdiction a signatory to the New York Convention? If so, have any reservations been made?
 
Montenegro
Yes, Montenegro is a party to the New York Convention. Montenegro succeeded to the Convention on 23 October 2006, following its proclamation of independence from the Federal Republic of Yugoslavia, which had previously been a party to the New York Convention. On succession, Montenegro restated the following reservations declared by the Federal Republic of Yugoslavia as the predecessor state:

  • reciprocity;
  • non-retroactive application; and
  • applicability to commercial disputes.

However, with the adoption of the Arbitration Act, the reservations of reciprocity and applicability to commercial disputes have lost their practical effect, since the applicant for recognition may refer to the more favourable provisions of the Arbitration Act, which does not prescribe those two conditions.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
1.7
Is your jurisdiction a signatory to any other treaties relevant to arbitration?
 
Montenegro
Montenegro is also a party to:

  • the European Convention on International Commercial Arbitration (also succeeded to on 23 October 2006);
  • the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (entered into force on 10 May 2013); and
  • the Energy Charter Treaty (entered into force on 7 December 2015).

Additionally, Montenegro has concluded a number of bilateral investment treaties.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
2.
Arbitrability and restrictions on arbitration
2.1
How is it determined whether a dispute is arbitrable in your jurisdiction?
 
Montenegro
The Arbitration Act sets a very general standard of arbitrability, providing only that “arbitration cannot be conducted when the other act stipulates that the particular disputes may not be resolved by arbitration” (Article 3(2)).

While the wording of the Arbitration Act seems to refer only to an explicit statutory prohibition on arbitration in particular cases, the nature of arbitration warrants that the conventional requirement of the dispositive nature of disputes must also be met.

It remains to be seen how the Montenegrin courts will construe the Arbitration Act in terms of arbitrability. Matters which are subject to the exclusive jurisdiction of the Montenegrin courts include, for example:

  • disputes as to property rights and lease over real estate (Article 42 of the Civil Procedure Act);
  • insolvency proceedings (Article 44 of the Civil Procedure Act);
  • enforcement proceedings (Article 44 of the Civil Procedure Act);
  • certain cases regarding the establishment, validity of incorporation, nullity or dissolution of companies or legal persons, or the validity of decisions of their bodies, provided that they have a statutory seat in Montenegro (Article 118 of the International Private Law Act); and
  • certain cases related to proceedings in intellectual property matters (Article 122 of the International Private Law Act).
For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
2.2
Are there any restrictions on the choice of seat of arbitration for certain disputes?
 
Montenegro
No, there are no restrictions on the choice of seat of arbitration.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
3.
Arbitration agreement
3.1
What are the validity requirements for an arbitration agreement in your jurisdiction?
 
Montenegro
For an arbitration agreement to be valid and enforceable, it must:

  • be concluded or deemed to be concluded in writing (Article 9(3) of the Arbitration Act);
  • be concluded by the parties, which have the necessary capacity to do so (Article 9(1)); and
  • refer to disputes which:
    • arise from a defined legal relationship, whether contractual or not (Article 9(1)); and
    • are capable of settlement by arbitration under Montenegrin law (Articles 3(2), 48(2)(1) and 52(2)(1)).
For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
3.2
Are there any provisions of legislation or any other legal sources in your jurisdiction concerning the separability of arbitration agreements?
 
Montenegro
Yes, the Arbitration Act prescribes that an arbitration agreement may be concluded in the form of either a separate agreement or an arbitration clause within a broader contract between the parties (Article 9(2)). Even if the arbitration agreement is concluded in the form of an arbitration clause, that clause shall be treated separately from the underlying contract when ruling on the existence or validity of the arbitration agreement (Article 19(3)).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
3.3
Are there provisions on the seat and/or language of the arbitration if there is no agreement between the parties?
 
Montenegro
Yes, the Arbitration Act contains rules on both the seat and the language of the proceedings if the parties have not agreed on these issues.

In that sense, Article 32 of the Arbitration Act provides that the seat or place of arbitration:

  • shall be determined by the arbitral tribunal, having regard to the circumstances of the case, including the convenience of the parties;
  • shall be determined according to the rules of the arbitral institution to which the parties entrusted the administration of their case; or
  • if not established as per the above, shall be deemed to be the place designated in the arbitral award as the place where the arbitral award was made.

Notwithstanding the above, the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for conducting deliberations; hearing witnesses, experts or the parties; or inspecting goods, property or documents.

Under the Arbitration Act, the arbitral tribunal will determine the language or languages to be used in the proceedings. Otherwise, the language in international arbitrations shall be English by default (Article 34).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
4.
Objections to jurisdiction
4.1
When must a party raise an objection to the jurisdiction of the tribunal and how can this objection be raised?
 
Montenegro
The Arbitration Act states that a jurisdictional objection must be raised no later than submission of the statement of defence (Article 20(1)). A party is not precluded from raising such a plea if it has appointed or participated in the appointment of an arbitrator. The arbitral tribunal may admit a later plea if it considers the delay justified (Article 20).

The arbitral tribunal may rule on an objection to jurisdiction either as a preliminary question or in an award on the merits (Article 19).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
4.2
Can a tribunal rule on its own jurisdiction?
 
Montenegro
Yes, the Arbitration Act stipulates that the arbitral tribunal rules on its own jurisdiction, including any objection with respect to the existence or validity of the arbitration agreement.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
4.3
Can a party apply to the courts of the seat for a ruling on the jurisdiction of the tribunal? In what circumstances?
 
Montenegro
If the arbitral tribunal rules on a jurisdictional objection as a preliminary question, any party may, within 30 days of the date of service of that ruling, request the competent court to decide the matter. The resulting court decision is not subject to appeal (Article 20(6)).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
5.
The parties
5.1
Are there any restrictions on who can be a party to an arbitration agreement?
 
Montenegro
Except for the requirement of necessary power and capacity to conclude the arbitration agreement, there are no further restrictions as to who can be a party thereto.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
5.2
Are the parties under any duties in relation to the arbitration?
 
Montenegro
While the Arbitration Act remains silent on this issue, Article 10 of the Civil Procedure Act (which is a statute that generally regulates civil proceedings in Montenegro) provides for a general principle that the parties have a duty to exercise their procedural rights in good faith.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
5.3
Are there any provisions of law which deal with multi-party disputes?
 
Montenegro
No, there are no explicit provisions dealing with multi-party disputes in the Arbitration Act. It is therefore likely that any arbitral tribunal in cases involving multi-party disputes will conduct the proceedings in line with the general authority to conduct the arbitration as it deems fit, while observing general principles such as party equality, party autonomy and efficient conduct of the proceedings.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
6.
Applicable law issues
6.1
How is the law of the arbitration agreement determined in your jurisdiction?
 
Montenegro
The Arbitration Act does not regulate this question explicitly. In general, the parties may choose the law applicable to the arbitration agreement. The law governing the arbitration agreement need not coincide with the law applicable to the underlying main contract; however, if the parties have agreed a governing law for the entire agreement, which contains an arbitration clause, it could be reasonably argued that there is a presumption that the law governing the main contract will also govern the arbitration clause.

If the parties have not agreed (expressly or implicitly) on a law applicable to the arbitration agreement, such law may be established implicitly through provisions on setting aside and grounds for refusing recognition of an award. Given that an award may be set aside or refused recognition if the arbitration agreement was not valid under the law of the place where the award was made (Articles 48(1)(1) and 52(1)(1)), it follows that the law of the place of arbitration should govern the arbitration agreement in the absence of the parties’ agreement to that effect.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
6.2
Will the tribunal uphold a party agreement as to the substantive law of the dispute? Where the substantive law is unclear, how will the tribunal determine what it should be?
 
Montenegro
The Arbitration Act states that the arbitral tribunal shall decide the dispute in accordance with the rules of law chosen by the parties as applicable to the substance of the dispute (Article 40(1)).

Unless the parties have agreed otherwise, any choice of a law or legal system of a given state is construed as a direct choice of that state’s substantive law, to the exclusion of its conflict of laws rules (Article 40(2)).

In the absence of the parties’ agreement, the arbitral tribunal should apply the law determined by the conflict of laws rules which it considers applicable (Article 40(3)). A decision ex aequo et bono may be made only if the parties have expressly authorised the tribunal to do so (Article 40(4)).

When making a decision, the arbitral tribunal shall decide in accordance with the provisions of the arbitration agreement and shall take into account customary practices in the trade applicable to the transaction underlying the dispute (Article 40(5)).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
7.
Consolidation and third parties
7.1
Does the law in your jurisdiction permit consolidation of separate arbitrations into a single arbitration proceeding? Are there any conditions which apply to consolidation?
 
Montenegro
The Arbitration Act does not contain provisions dealing with consolidation and thus does not prohibit this. As a result, consolidation may be effected, for example, through the parties’ agreement, either expressly in the arbitration agreement or by way of application of a specific set of arbitral rules that allow for consolidation of arbitrations.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
7.2
Does the law in your jurisdiction permit the joinder of additional parties to an arbitration which has already commenced?
 
Montenegro
The Arbitration Act likewise does not contain provisions dealing with joinder of additional parties. Therefore, joinder of parties is not prohibited in principle, and could follow from the parties’ agreement in the arbitration clause or the application of arbitral rules that allow joinders.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
7.3
Does an arbitration agreement bind assignees or other third parties?
 
Montenegro
No provisions in the Arbitration Act expressly regulate the assignment of an arbitration agreement. If Montenegrin substantive law is applicable, however, the arbitration agreement may be passed on to an assignee through an assignment of contract under the Montenegrin Obligations Act (Article 139). The Obligations Act also stipulates that an agreement is binding on its parties only and creates no obligations or rights for third parties (Article 10).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
8.
The tribunal
8.1
How is the tribunal appointed?
 
Montenegro
The parties are free to agree on a procedure for the appointment and constitution of the tribunal. If they fail to reach such an agreement, Article 13(2) of the Arbitration Act provides as follows:

  • If the parties fail to appoint their sole arbitrator within 30 days of one party’s invitation to the other to make a joint appointment, such appointment shall be made by an appointing authority selected by the parties. If no appointing authority is selected or if it fails to appoint the arbitrator, the Commercial Court shall make the appointment (Articles 13(3) and 13(4)).
  • In case of a three-member tribunal:
    • each party appoints one arbitrator within 30 days of the other party’s invitation to make the appointment. Otherwise, the missing arbitrator is appointed by the appointing authority or the Commercial Court, if the appointing authority has not been selected or fails to make the appointment (Article 13(6)); and
    • the presiding arbitrator is chosen by the co-arbitrators within 30 days of the date of their appointment. Otherwise, the president is appointed by the appointing authority or the Commercial Court, if the appointing authority has not been selected or fails to make the appointment.
  • If a dispute is to be resolved by more than three arbitrators, each party appoints an equal number of arbitrators (Articles 13(7) and 13(9)).
For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
8.2
Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?
 
Montenegro
The Arbitration Act leaves it to the parties to determine the number of arbitrators. However, the default rules of the Arbitration Act also provide that if the arbitration agreement provides for more than one arbitrator, the number of arbitrators must be odd. If the parties fail to determine the number of arbitrators, the arbitral tribunal will be composed of three arbitrators by default (Article 12).

The Arbitration Act does not require that arbitrators possess specific qualifications other than, generally, legal capacity (Article 13(1)). However, the parties may agree on specific qualifications they deem necessary (Article 15(3)).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
8.3
Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?
 
Montenegro
Pursuant to the Arbitration Act, an arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his or her independence or impartiality, or if the arbitrator does not possess the qualifications agreed by the parties (Article 15).

A party may challenge an arbitrator appointed by it, or in whose appointment it has participated, only if the grounds for challenge materialise or if the party becomes aware of such grounds after the arbitrator has been appointed (Article 15(4)).

Unless the parties have agreed otherwise, the written request for challenge must be submitted within 15 days of the arbitrator’s appointment or of the party’s becoming aware of the grounds for challenge (Articles 16(1) and 16(2)).

If the challenge is rejected, the dissatisfied party may request the competent court to decide the challenge within 30 days of receiving the tribunal’s decision (Article 16(4)).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
8.4
If a challenge is successful, how is the arbitrator replaced?
 
Montenegro
If the challenge is successful, a substitute arbitrator is appointed according to the rules applicable to the appointment of arbitrators (Article 18).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
8.5
What duties are imposed on arbitrators? Are these all imposed by legislation?
 
Montenegro
Under the Arbitration Act:

  • the arbitrator must give a written statement on acceptance of his or her appointment (Article 14(1));
  • an arbitrator must act in a timely manner and avoid any delay (Article 14(2));
  • an arbitrator must, without delay, disclose any circumstances likely to give rise to justifiable doubts as to his or her independence or impartiality (Article 15);
  • the tribunal must give each party an opportunity to present its case and evidence and to respond to actions and proposals of the opposing party (Article 30); and
  • the tribunal should communicate to each party all statements, documents or other information supplied by the opposing party (Article 36(4)), as well as any evidentiary expert report or document on which the arbitral tribunal may base its decision (Article 36(5)).

In general, however, it is in the nature of the arbitrators’ position that they must decide on the parties’ requests, procedural or substantive, and must uphold and observe general principles such as due process, good faith, party equality, efficiency and party autonomy.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
8.6
What powers does an arbitrator have in relation to: (a) procedure, including evidence; (b) interim relief; (c) parties which do not comply with its orders; (d) issuing partial final awards; (e) the remedies it can grant in a final award and (f) interest?
 
Montenegro
(a) Procedure, including evidence?

If the parties fail to agree on the rules of the arbitration proceedings, the arbitral tribunal may, subject to the Arbitration Act, conduct the proceedings as it deems appropriate, including with regard to the right to determine the admissibility, relevance and weight of any proposed and adduced evidence (Article 31).

In such terms, the Arbitration Act provides, for example, that the tribunal may decide on the language and place of arbitration (Article 34), and whether the proceedings will be conducted through hearings or through the exchange of documents and other materials (Article 36(1)). Likewise, the arbitral tribunal may:

  • appoint one or more experts to report to it on specific issues; or
  • require a party to give the expert any relevant information or produce, or provide access to, any relevant documents, goods or other property for inspection (Article 38(1)).

In any event, the arbitral tribunal may request legal assistance from the competent court with regard to the taking of evidence. The arbitrators may participate in the procedure of taking evidence before the court (Article 39(1)).

(b) Interim relief?

The tribunal has the authority under the Arbitration Act to order interim measures, at any party’s request, unless the parties have agreed to divest the tribunal of such authority. The tribunal may grant a variety of interim measures, such as ordering the parties to:

  • maintain or restore the status quo pending determination of the dispute;
  • take action that would prevent, or refrain from taking action that is likely to cause, current or future harm or prejudice to the arbitral process;
  • preserve assets out of which the subsequent award may be enforced; or
  • preserve evidence that may be relevant to the resolution of the dispute (Article 21).

In the interim measures context, the tribunal may:

  • impose an obligation on the party requesting an interim measure to provide appropriate security (Article 24);
  • require the parties promptly to disclose any change in the facts on the basis of which the interim measure was requested or ordered (Article 25);
  • modify, suspend or terminate an interim measure upon the application of any party or, in exceptional circumstances and with prior notice to the parties, of its own initiative (Article 23); and
  • at any point during the proceedings, award costs and damages to the party suffering such costs and damages owing to an interim measure ordered against it, provided that the tribunal establishes that such interim measure should not have been granted previously (Article 26).

(c) Parties which do not comply with its orders?

In general, tribunals do not have the authority to compel the parties to comply with tribunal orders, (ie, to enforce their own orders). However, tribunals may use the usual tools - such as drawing adverse inferences and exercising discretion in allocating costs - to ensure the parties’ procedural discipline. Likewise, within its power to conduct the proceedings as it deems fit, the tribunal may in certain cases suspend the proceedings pending a party’s compliance with its orders (eg, in case of interim measures).

The Arbitration Act provides another tool where one of the parties fails to appear at a hearing or to produce documentary evidence within the relevant timeframes. In such cases the tribunal may continue the proceedings and render its award based on the evidence that has been submitted to it (Article 37).

(d) Issuing partial final awards?

Under the Arbitration Act, tribunals are authorised to issue partial awards (Article 43(2)). However, the Arbitration Act sets out no requirements or further guidance. Although the Civil Procedure Act is not directly applicable to arbitration, it does provide general rules for civil proceedings in Montenegro, which – applied to arbitration – allow a partial award to be rendered where part of a claim or one or several of multiple claims before the tribunal are ripe for final adjudication (Article 335 of the Civil Procedure Act).

(e) The remedies it can grant in a final award?

The Arbitration Act does not anticipate the types of remedies which can be granted in a final award. The tribunal is free to decide on the requests of the parties and to issue an award within the scope of their petitions and the underlying arbitration agreement, to the extent that such requests are not contrary to Montenegrin public policy, assuming that the seat of the arbitration is in Montenegro.

(f) Interest?

The Arbitration Act does not contain provisions regarding interest. This matter might be considered a part of the applicable substantive law to the dispute. As such, arbitral tribunals applying Montenegrin law can award default interest, if so requested, under the Montenegrin Default Interest Act.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
8.7
How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?
 
Montenegro
Article 37 of the Arbitration Act prescribes that, unless otherwise agreed by the parties, if:

  • the claimant fails to communicate its statement of claim without showing sufficient cause, this will result in termination of proceedings;
  • the respondent fails to communicate its statement of defence without showing sufficient cause, the proceedings shall continue and such failure will not be treated as admission of the claimant’s allegations; or
  • one of the parties fails, without showing sufficient cause, to appear at a hearing or produce documentary evidence within the relevant timeframe, the tribunal may continue the proceedings and render the award based on evidence that was submitted.
For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
8.8
Are arbitrators immune from liability?
 
Montenegro
The Arbitration Act does not contain express provisions regarding arbitrators’ immunity. However, to the extent that Montenegrin law applies, the Obligations Act allows for a contractual exclusion of the arbitrators’ liability for damages (eg, in the terms of appointment or a similar instrument), except for damages caused intentionally or through gross negligence (Article 272 of the Obligations Act). A contractual exclusion of criminal liability, in principle, is not valid under Montenegrin law.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
9.
The role of the court during an arbitration
9.1
Will the court in your jurisdiction stay proceedings and refer parties to arbitration if there is an arbitration agreement?
 
Montenegro
If there is an arbitration agreement between the parties, upon a party’s objection to that effect, the court shall declare that it lacks jurisdiction, revoke all actions taken in the proceedings and refuse to rule on the claim, unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed. Such objection should be raised no later than the statement of defence (Article 10 of the Arbitration Act; Article 21 of the Civil Procedure Act).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
9.2
Does the court in your jurisdiction have any powers in relation to an arbitration seated in your jurisdiction and/or seated outside your jurisdiction? What are these powers? Under what conditions are these powers exercised?
 
Montenegro
Where the seat of arbitration is in Montenegro, the Montenegrin court may decide on:

  • the appointment of arbitrators, as described in question 24 (Article 13);
  • the challenge of arbitrators, if the parties do not agree on the challenge procedure or if the arbitral tribunal rejects the request for challenging an arbitrator (Article 16);
  • the termination of an arbitrator’s mandate, if the arbitrator fails to withdraw and the parties fail to agree on the termination of the arbitrator’s mandate (Article 17);
  • the jurisdiction of the tribunal and acts that exceed the scope of its authority, if the arbitral tribunal rules on the jurisdictional objection or objection that the tribunal has exceeded the scope of its authority as a preliminary question (Article 20); and
  • the setting aside of a domestic arbitral award (Article 47).

Regardless of whether the seat of the arbitration is in Montenegro, a Montenegrin court may:

  • assist the tribunal in taking evidence (Article 39);
  • recognise a valid arbitration agreement by rejecting jurisdiction and revoking all actions already taken before the court (Article 10);
  • order interim measures, whether before or during the arbitral proceedings (Article 11);
  • recognise and enforce arbitral interim measures, irrespective of the country in which they were ordered, provided that there are no grounds to refuse recognition and enforcement of interim measures (Articles 27 and 28); and
  • recognise and enforce foreign arbitral awards, provided that there are no grounds to refuse recognition and enforcement (Article 51).
For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
9.3
Can the parties exclude the court's powers by agreement?
 
Montenegro
The Arbitration Act does not deal with this issue explicitly, save for expressly excluding the possibility for the parties to waive in advance their right to set aside the award (Article 48(4)). Given that the courts’ powers are vested in them directly by the Arbitration Act, it is disputable whether the parties could, of their own accord and in all cases, divest the courts of such statute-based powers. In any event, the possibility of waiving specific rights should be assessed separately and on a case-by-case basis.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
10.
Costs
10.1
How will the tribunal approach the issue of costs?
 
Montenegro
The Arbitration Act states only that an arbitrator has the right to reimbursement of fees and expenses for work performed, unless he or she has waived those rights expressly in writing. It also prescribes that the parties are jointly and severally liable for the payment of such fees and expenses.

The arbitrators’ decision on fees and expenses are not binding on the parties if they do not accept it. Where the parties do not accept the amount of the arbitrators’ fees and expenses, the arbitral institution or the appointing authority shall decide the matter, on the request of an arbitrator or a party. The resulting decision of the arbitral institution or the appointing authority is an enforcement title (Article 14).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
10.2
Are there any restrictions on what the parties can agree in terms of costs in an arbitration seated in your jurisdiction?
 
Montenegro
The Arbitration Act contains no explicit limitations in this regard.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
11.
Funding
11.1
Is third-party funding permitted for arbitrations seated in your jurisdiction?
 
Montenegro
The Arbitration Act contains no provisions and thus no limitations in terms of third-party funding.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
12.
Award
12.1
What procedural and substantive requirements must be met by an award?
 
Montenegro
The tribunal will resolve all of the parties’ requests in the award. The tribunal may render a partial award, as noted above.

The arbitral award shall:

  • be made in writing;
  • be signed by the members of the tribunal or the sole arbitrator. In case of a tribunal, the signatures of a majority of members will suffice, provided that reasons are stated for the omission of any signature;
  • be reasoned, unless otherwise agreed by the parties; and
  • state the date and place of the award, as well as whether the award is based on the parties’ settlement (Article 43)..
For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
12.2
Must the award be produced within a certain timeframe?
 
Montenegro
There is no timeframe prescribed by the Arbitration Act within which the award must be made.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
13.
Enforcement of awards
13.1
Are awards enforced in your jurisdiction? Under what procedure?
 
Montenegro
An award made by a tribunal seated in Montenegro is enforced directly under the enforcement and security law (Article 46). However, foreign arbitral awards must first be recognised in Montenegro.

A foreign award shall be recognised unless the court finds that:

  • there are grounds to refuse recognition;
  • the award has not become binding; or
  • the award has been set aside or suspended in the country in which, or under the law of which, it was made (Article 51(1)).

The following grounds, if raised by a party, may lead to refusal of recognition:

  • The arbitration agreement is not valid under the applicable law;
  • The party was not given proper notice of the arbitrators’ appointment or the arbitral proceedings, or was otherwise unable to present its case;
  • The award decides on matters not contemplated by or exceeding the scope of the arbitration agreement; or
  • The tribunal was not constituted or the proceeding was not conducted in accordance with the arbitration agreement or the law of the place of arbitration (Article 52(1)).

The court shall further refuse recognition ex officio if:

  • the dispute is not arbitrable; or
  • the effects of the arbitral award would be contrary to Montenegrin public policy (Article 52(2)).

The recognition proceedings are initiated on a party’s application, accompanied by:

  • the original arbitral award or a certified copy;
  • the original arbitration agreement or a certified copy; and
  • a certified translation of the award and arbitration agreement into Montenegrin or another language in official use in Montenegro (Article 51(3)).
For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
14.
Grounds for challenging an award
14.1
What are the grounds on which an award can be challenged, appealed or otherwise set aside in your jurisdiction?
 
Montenegro
A domestic arbitral award may be set aside if the applicant proves that:

  • the arbitration agreement was not concluded or is not valid under the applicable law, unless otherwise agreed by the parties;
  • a party to the proceedings did not have the capacity to conclude the arbitration agreement or was not duly represented;
  • the applicant was not given proper notice of the initiation of the proceedings or was otherwise unlawfully prevented from presenting its case;
  • the award decides on matters not contemplated by or exceeding the scope of the arbitration agreement;
  • the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the Arbitration Act or a permissible agreement of the parties, and that fact could have affected the content of the arbitral award; or
  • the award does not contain the statement of reasons or has not been signed (Article 48(1)).

The court shall also set aside the award of its own motion if:

  • the dispute was not arbitrable; or
  • the award contradicts Montenegrin public policy (Article 48(2)).
For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
14.2
Are there are any time limits and/or other requirements to bring a challenge?
 
Montenegro
An application to set aside an award must be submitted within three months of the date on which the award is served on the party (Article 48(3)).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
14.3
Are parties permitted to exclude any rights of challenge or appeal?
 
Montenegro
The Arbitration Act prescribes that the parties may not waive their right to apply to set aside the arbitral award (Article 48(4)).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
15.
Confidentiality
15.1
Is arbitration seated in your jurisdiction confidential? Is a duty of confidentiality found in the arbitration legislation?
 
Montenegro
The only rule that the Arbitration Act provides in relation to confidentiality is that arbitral proceedings shall be closed to the public, unless otherwise agreed by the parties (Article 36(6)). However, in line with the general principles applicable in this regard, it could be argued compellingly that commercial arbitrations are confidential by default. That said, the scope of such confidentiality is subject to debate.

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law
15.2
Are there any exceptions to confidentiality?
 
Montenegro
Under the Arbitration Act, the parties may agree to exclude confidentiality (Article 36(6)).

For more information about this answer please contact: Tanja Šumar from Schoenherr Attorneys at Law