In Montenegro, a new Law on Insolvency was adopted in December 2010 and entered into force in the beginning of 2011. Furthermore, as of the end of July 2011, public notaries began providing their services in accordance with the Law on Notaries.
The new Law on Insolvency (Official Gazette of the Republic of Montenegro, no. 01/11, the "LI") has become applicable in Montenegro as of 20 January 2011.
The LI has largely been based on the UNCITRAL Guide on Insolvency Law from 2004. The main characteristics of the LI are the following:The LI has largely been based on the UNCITRAL Guide on Insolvency Law from 2004. The main characteristics of the LI are the following:
- Redefined insolvency criteria (a permanent inability to pay and over indebtedness, as well as the failure to comply with a reorganization plan that has been adopted, or the participation in a fraudulent and/or illegal plan) and principles regarding the insolvency proceedings;
- A change in the competence of the authorities in the insolvency proceedings, as well as changes to the procedural provisions that relate to the insolvency estate, the ranking of creditors and the settlement of insolvency creditors;
- The redefining the consequences of the insolvency procedure, including provisions related to important matters such as the right to set-off, conditional claims and cherry picking;
- Changes to the regime for the challenging of the transactions of the insolvency debtor (regular and irregular settlement, direct and wilful harm to creditors, transactions at undervalue or without consideration as well as transactions with related parties);
- Provisions regulating reorganization, as well as the detailed regulation of the reorganization plan;
- Provisions regulating international insolvency.
Montenegrin courts are yet to take a clear position with regard to the application of the LI and the introduction of modern concepts of insolvency law in Montenegro. This relates primarily to insolvency linked to the financial transactions, such as loans and transactions with financial derivatives that are essentially linked to newly-introduced provisions such as setting-off and cherry picking.
Notaries began to work in Montenegro
Three years after the adoption of the Law on Notaries (Official Gazette of the Republic of Montenegro, nos. 68/05 and 49/08), notaries in Montenegro finally commenced work on 25 July 2011. They have the authorization to draft notarial documents; safeguard documents, monies, securities and other objects, and perform other duties upon receipt of a court order or under the obligations provided by statutory authorization.
Notarial documents. Notarial documents include: (i) a notarial deed (which represents an enforceable deed if statutory requirements are met) (ii) notarial minutes (which confirm the facts that are condition for the validity of a transaction: offer, warning, dismissal or termination of an agreement); (iii) notarial confirmation; and (iv) notarial certification (certification of signatures and copies). A document may be notarised in a foreign language only when the notary isa court sworn interpreter for the language in which the document is being notarised. If some of the participants do not understand the language upon which the notarial act is made, the presence of the sworn court interpreter is mandatory. The notarial fees and the reimbursement of costs are set out in the notarial tariff document.
Transactions executed as a notarial deed. The Law prescribes a list of transactions which, in order to be legally effective, need to be notarised. These are as follows: 1) marital agreement and an agreement on property issues between spouses and partners; 2) agreements on the disposal of assets of minors and persons without business capacity (regarding immovables or objects or rights of greater value) 3) agreements on the division and transfer of assets, maintenance agreements and inheritance statements; 4) purchase agreements with a retention of title; 5) gift pledges and gifts causa mortis; 6) transactions related to the transfer or acquisition of title or other property rights over immovables (to be notarised by a notary who's jurisdiction is within the area the immovables are located). From the beginning of the notaries' work, agreements may not be certified anymore in competent courts (which have previously provided such service).
With respect to collaterals, mortgage agreements and (preferably) share pledge agreements should from now on be executed in the form of a notarial deed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.