The state of Bosnia and Herzegovina (BiH) consists of two entities – the Federation of Bosnia andHerzegovina (FBiH) and the Republika Srpska (RS), and a special autonomous district under the directsovereignty of the state – the Brčko District (BD). The entities have their own set of relatively distinctlaws, but some matters are regulated by national laws which apply to both entities.
Court organization, jurisdiction, financing of courts and other related issues in BiH are regulated at theentity level, in FBiH by the Law on Courts in FBiH (Zakon o sudovima u Federaciji Bosne i Hercegovine)and in RS by the Law on Courts of RS (Zakon o sudovima Republike Srpske).
In 1998, BiH began with a reform of its judicial system which is still ongoing. Although significantprogress has been made since then, the reform process and implementation of the new laws has beengenerally slow and inconsistent, mainly due to the high number of unresolved cases and inadequatetraining and education of judges in the new procedural legislation. Consequently, court practices andprocedures tend to vary significantly from court to court and judge to judge.
The FBiH court structure consists of Municipal Courts (Općinski sudovi), Cantonal Courts (Kantonalnisudovi) and the FBiH Supreme Court (Vrhovni sud FBiH). All civil and commercial disputes, as well asbankruptcy proceedings, enforcement proceedings and the registration of companies, including allrelated issues, are within the competence of the Municipal Courts. However, it should be noted thatcommercial disputes can only be brought before Municipal Courts which have a commercial division.Under the Law on Courts in FBiH, a commercial dispute is considered to be any dispute betweenbusiness companies and/or entrepreneurs related to the trade of goods, services, securities, real estateetc., disputes related to ships and sailing (except passenger transport), aircrafts and air traffic (exceptpassenger transport), industrial property and copyrights, trusts and commercial offences.
Appeals against judgments of the Municipal Courts may be filed with the competent Cantonal Court.Aside from appeals, Cantonal Courts are first instance courts in criminal matters related to major crimes.In addition, the Cantonal Courts have exclusive competence to resolve jurisdictional conflicts betweenthe Municipal Courts and are the courts of first instance for the recognition of foreign judgments. TheFBiH Supreme Court is the highest appeals court and has exclusive competence to hear appeals fromjudgments of the Cantonal Courts. The FBiH Supreme Court also resolves jurisdictional conflictsbetween lower courts from different Cantons in FBiH.
The commercial courts in RS are competent to resolve disputes and matters in civil and extra-ordinaryproceedings, which relate to issues arising out of contracts concluded between legal entities regardinglegal transactions involving goods, services, securities, ownership and other rights as well as fordisputes and matters related to bankruptcy, ships, planes, copyrights, foreign investments, establishmentof legal entities, etc. The commercial courts are established at two levels: six first instance DistrictCommercial Courts and one second instance Higher Commercial Court, with its seat in Banja Luka,which decides on appeals against decisions of the District Commercial Courts as well as on competencyissues and the establishment of legal standards for the uniform application of laws.
The RS court structure consists of: (a) 28 Basic Courts (Osnovni sudovi) which have authority incriminal, civil and enforcement proceedings under conditions set out in the Law on Courts in RS; (b) sixDistrict Courts (Okružni sudovi); (c) six District Commercial Courts (Okružni privredni sudovi); (d) theHigher Commercial Court (Viši privredni sud); and (e) the Supreme Court of RS (Vrhovni sud RS).Appeals against awards of the Basic Courts may be filed with the competent District Courts. Aside fromappeals, District Courts are also first instance courts for major crimes, administrative disputes and therecognition of foreign court judgments/arbitral awards. The highest appeals court in RS is the SupremeCourt, with essentially the same competences as the FBiH Supreme Court.
Both entities have Constitutional Courts, the competency of which is to uphold the respective entityconstitutions.
The BiH judicial system consists of the following state-level judicial institutions: the Court of BiH (SudBiH) and the Constitutional Court of BiH (Ustavni sud BiH). The Court of BiH has three divisions:Criminal Division, Administrative Division and Appellate Division, and is, inter alia, competent for theprosecution of war crimes, organized crime, commercial crime, corruption and violations of election laws.The Constitutional Court of BiH is competent to support and protect the Constitution of BiH, whichincludes cases when a violation of human rights is alleged due to a judgment or decision of any judicialinstitution in BiH. The Constitutional Court is not a part of the legislative, executive or regular judicialauthorities but is positioned under the BiH Constitution as a special and independent authority whichoperates, based on the Constitution, as the correction factor for all three segments of the authority.
The FBiH Civil Procedure Act (Zakon o parničnom postupku FBiH) and RS Civil Procedure Act (Zakon oparničnom postupku RS), were enacted in 2003 to accelerate and simplify civil litigation proceedings andenhance the efficiency of the BiH courts. The Acts, to a large extent, correspond to each other, but inpractice the courts may slightly differ in the manner in which the various provisions are applied. Thelitigation process begins by delivering the lawsuit to the defendant. The defending party has the right torespond to allegations set forth in the lawsuit. All communications between the parties are generallymade through the court in a written form, apart from direct oral communications during court hearings.
Generally, the litigation process entails two hearings: a preparatory hearing (pripremno ročište), and amain hearing (glavna rasprava), after which the court renders its judgment. An unsatisfied party may filean appeal against the award of the court of first instance to the competent Cantonal Court in FBiH orDistrict Court/Higher Commercial Court in RS, but only for one of the reasons provided for in the relevantcode of civil procedure. Decisions issued by the second instance court may be challenged before therelevant Supreme Court for a limited number of reasons set forth in the respective civil procedure codesand only if the amount in dispute exceeds BAM 30,000 (approximately EUR 15,000) or BAM 50,000(approximately EUR 25,000) for commercial disputes in FBiH and RS.
Although the FBiH Civil Procedure Act and RS Civil Procedure Act provide for relatively expedited courtproceedings, in practice litigation may last several years, due to the backlog of cases before the courtsthroughout BiH.
Litigation costs typically include court fees, attorneys’ fees, remuneration for experts and witnesses,translation expenses, etc., which may in the aggregate be substantial, depending on the amount indispute. The losing party is obligated to reimburse all costs of the proceedings to the successful party atthe conclusion of the proceedings.
Criminal acts are generally regulated by criminal codes (krivični zakon) adopted at both entity and statelevels, as well as at the level of BD, while rules of criminal procedure are provided in the criminalprocedure codes (zakon o krivičnom postupku) also adopted at entity, state and BD level. Due to theprocess of harmonization of criminal procedure codes within BiH which started in 2003, all these legalacts in principle provide for substantively the same rules of criminal procedure.
The criminal codes of BiH, FBiH, RS and BD provide for a set of criminal acts which can be classified asbusiness crimes, i.e., criminal acts against commerce, business and security of money transfers. Inaddition, the relevant codes also define criminal acts of bribery (corruption), as well as tax-relatedcriminal acts. This group of crimes includes acts, inter alia, causing bankruptcy, damaging creditors,creating a monopoly position on the market, revealing business secrets, counterfeiting money orsecurities, money laundering, illicit trade and production, etc.
In addition to the liability of natural persons, the relevant criminal codes also regulate the criminal liabilityof legal entities, which can be penalized with monetary fines, seizure of property or liquidation of thelegal entity. In general, a legal entity is liable for criminal acts committed on the territory of BiH. Ingeneral, a legal entity can be liable for criminal acts that its legal representative committed in the nameand for the account of such legal entity, in situations defined by the respective criminal code.
As previously outlined, the criminal procedure in BiH is governed by the criminal codes of BiH, FBiH, RS andBD. In general, the criminal procedure consists of three stages: investigation, denunciation and the mainhearing. The procedure is initiated by the prosecutor who is authorized to issue an order for an investigation,if it finds that there are reasons to doubt (osnovi sumnje) that a criminal act has been committed. Providingthat the investigation results in sufficient material (e.g. supporting evidence) confirming that there isreasonable doubt (osnovana sumnja) that a criminal act has been committed and who the offender is, theprosecutor will commence the denunciation phase of the procedure by raising an indictment.
The indictment is submitted to the competent court in writing. Upon receipt of the indictment, the court passesa decision confirming or rejecting all or certain allegations of the submitted indictment. If the court confirmsthe indictment entirely or partially, it schedules a main hearing where the prosecutor and the defendant maypresent their cases, by submitting documents, examining fact and expert witnesses, etc., and through closingarguments. The first instance procedure is terminated after the court renders the judgment.
The judgment is based on the facts and evidence presented by the parties during the main hearing. Anunsatisfied party may file an appeal to the competent Cantonal Court in FBiH or District Court in RS, forthe reasons provided in the relevant codes of criminal procedure. Judgments of the appellate courts mayfurther be challenged before the relevant Supreme Courts of FBiH and RS for a limited number ofreasons. In BD, an unsatisfied party may file an appeal to the BD Appellate Court, while an appealagainst decisions of the BiH Court can be filed with the Appellate Council of the BiH Court.
Generally, the prosecutor plays the key role in criminal proceedings as the criminal procedure can beinitiated and conducted only on the basis of a prosecutor's request. In the course of the procedure, theprosecutor undertakes actions for which it is authorized by law. An illustrative example is theprosecutor's role in the investigation procedure. In particular, a prosecutor is authorized to undertake allinvestigation activities, including questioning the suspect and hearing the injured party, performinginspections and reconstructions of events, undertaking special measures which ensure the safety of thewitnesses and information, and ordering the necessary expertise, in accordance with the rules stipulatedin the relevant criminal procedure codes.
In any case, the prosecutor can undertake actions either alone or through persons who are legally obligedto act on the basis of the prosecutor's orders. In that respect, the prosecutor supervises the work of theauthorized officers (e.g. police officers), i.e. persons who have adequate authorization within, inter alia, thepolice bodies of BiH, including the State Agency for Investigation and Protection, State Border Agency, andthe police bodies of the competent ministries of internal affairs. Moreover, the prosecutor is authorized torequest information from the state authorities, business companies, legal entities and natural persons, all ofwhom are obliged to notify the prosecutor of any actions undertaken and to act on the basis of its orders.
Generally, under the relevant laws, an injured person – i.e., a person whose personal or proprietaryrights have been violated or jeopardized by the committed criminal act - is typically considered as avictim and as such, has certain rights and obligations in the course of the criminal procedure.
In principle, the damaged person is entitled to be notified if the investigation will not be conducted or ifthe investigation has been suspended in order to be able to file an objection to the relevant decisions; tobe examined as a witness (which is usually the case); to be present during the hearing of fact and expertwitnesses; to file an appeal against the court's judgment with regard to the costs of the criminalprocedure and its property-related claim, etc. In any case, one of the important rights of the injured partyis the right to file a property-related claim for example for compensation for damages, return of goods orthe annulment of certain legal transactions.
If the court passes a decision finding the accused guilty, it can adjudicate the property-related claimentirely or partially. In case the court passes a decision finding the accused not guilty, it will further referthe injured party to claim its property-related claims in the course of civil litigation proceedings. In anycase, the court may propose that the involved parties settle the claim in a mediation procedure. Inpractice, courts in BiH rarely decide on property-related claims filed in criminal proceedings stating thatdeciding on this issue would unnecessarily prolong the criminal procedure. Therefore, the injured party isusually referred to civil proceedings to claim damages.
In principle, evidence used in criminal proceedings may be used in the civil procedure as well. Under therelevant codes on civil procedure, the court is, with regard to the existence of a criminal act and thecriminal liability of the offender, bound by the final decision of the court finding the accused person guilty.
Although the BiH, FBiH, RS and BD criminal procedure codes provide for relatively expedited courtproceedings, depending on the backlog of pending cases before the relevant courts and thecircumstances of the given case, in practice criminal proceedings last for at least 1 (one) year, with theexception of certain aspects of the criminal procedure, such as the issuance of the warrant forpronouncement of sentence (kazneni nalog), or the procedure for admission of guilt and plea bargainingwhich is quite often used in practice.
The costs of the criminal procedure typically include attorneys’ fees, detention costs, remuneration forexperts and witnesses, translation expenses, etc. The court determines and sets the amount of courtfees in the court judgment for each individual case.
If the accused is found guilty, it will bear all costs of the procedure. On the other hand, if the accused isfound not guilty, the costs of the procedure are borne by the state/entity/district budget.
In BiH, bankruptcy proceedings are regulated by the FBiH Bankruptcy Act (Zakon o stečajnom postupkuFBiH), and the RS Bankruptcy Act (Zakon o stečaju RS). The Acts are generally consistent and providefor a rather creditor-friendly insolvency system. Also, the new RS Bankruptcy Act regulates the newinstitutes for debt restructuring and sale of the debtor as a legal entity.
Under the BiH bankruptcy system, a company is deemed insolvent and is obligated to enter into abankruptcy procedure if the company is unable to meet all of its outstanding debts, within the perioddefined in the bankruptcy acts. Consequently, this may mean that a company that is capable of payingsome of its debts, but not all, may be considered to be insolvent. In FBiH, a company must enter intobankruptcy proceedings if it has been incapable of paying its debts (i.e. legally insolvent) for a period of30 (thirty) days. In RS, the insolvency period is 60 (sixty) days. In addition, both the FBiH and RSbankruptcy acts require compulsory filing for bankruptcy in certain defined cases.
The bankruptcy procedure is under the jurisdiction of the Municipal Courts in FBiH, and the DistrictCommercial Courts in RS. Bankruptcy proceedings are controlled by a single bankruptcy judge (stečajnisudija). The bankruptcy procedure is initiated with the filing of a petition by the company or any of itscreditors. In FBiH, a company engaged in the production of weapons and military equipment can be"pushed" into bankruptcy only upon the approval of the FBiH Ministry of Energy, Mining and Industry.The approval shall be deemed granted if the competent ministry is silent for more than 30 (thirty) days. Ifthe ministry denies its approval, the FBiH will jointly and severally be liable with the company for thecompany’s debts. In RS, to initiate a bankruptcy procedure against a company in which the state ownsthe majority of the share capital, the approval of the RS Government is required if (a) the company is inthe process of restructuring by the RS Direction for Privatization; or (b) until a privatization sale process,that has already been initiated, is completed and all deadlines for fulfilment of the buyer’s contractualobligations have expired. The approval shall be deemed granted if the RS Government is silent for morethan 30 (thirty) days.
The new RS Law on Bankruptcy entered into force on 10 March 2016. The most significant noveltiesintroduced by the law are
-the possibility of restructuring the debtor – as a legal entity – without having to initiate bankruptcyproceedings; and
-the possibility of selling the bankruptcy debtor as a whole in the course of the bankruptcy proceedings.
The restructuring enables an insolvent debtor to consolidate and continue with its business operations inaccordance with an operational and financial restructuring plan approved by the creditors who participatein the restructuring proceedings. Furthermore, the sale of the insolvency debtor as a whole in the courseof the bankruptcy proceedings also provides for the possibility that the bankruptcy debtor survivesbankruptcy proceedings. Namely, in case of such sale, the bankruptcy proceedings shall be terminatedin respect of the bankruptcy debtor and the bankruptcy debtor keeps its assets. The proceeds of the salebecome part of the bankruptcy estate and are shared among the bankruptcy creditors.
In addition to the above, the new RS Law on Bankruptcy provides a higher level of protection of therights of employees comparing to the previous law, since employee claims - up to the amount of 12gross minimum salaries - are classified as the high priority claims.
After the petition for bankruptcy has been filed with the court, the bankruptcy judge will initiate thepreliminary bankruptcy procedure and appoint a preliminary bankruptcy administrator (privremenistečajni upravnik) who will audit the company's business records and determine if the basis forbankruptcy exist. In the event the preliminary bankruptcy administrator determines the company isinsolvent and should enter into bankruptcy proceedings, the bankruptcy judge will commence thebankruptcy procedure, appoint a bankruptcy administrator, and set out dates for the notification of claimsand court hearings. All creditors must announce their claims within the period of time that is stipulated.
After the bankruptcy judge initiates the proceedings, all rights and responsibilities of the company’smanagement are transferred to the bankruptcy administrator by law. All court and arbitration proceedingsrelated to the company’s property and assets are suspended thereafter, and can be continued only incertain cases as set out in the bankruptcy laws. The court registers must be notified of the opening of thebankruptcy procedure and the words "in bankruptcy" (u stečaju) will be added to the company’s name. InRS, a decision to commence bankruptcy proceedings will also be delivered to the relevant stockexchange if the company is listed.
After appointment, the bankruptcy administrator is obliged to draft lists of the company’s assets and itscreditors. Pursuant to the claims of the creditors, the administrator then classifies the claims intopayment orders or ranks (isplatni redovi). A competent assessor must assess the company’s assets. Inpractice, the assessed value is always lower than the real market value which is why it is rarely possibleto repay and satisfy the full amount of a company's debts through bankruptcy proceedings.
Under the BiH bankruptcy system, creditors are entitled to decide on the settlement of their claims, i.e., ifthey will undergo asset sale and liquidation or if they will opt for the reorganization of the company. Thereorganization of a company is an important novelty in the BiH bankruptcy system and has provided forbetter long-term settlement of claims. At the same time, the insolvent company gets an opportunity tocontinue its business activities and overcome its difficulties.
Upon the request of creditors, a reorganization plan may be drafted and submitted to the bankruptcycourt by the insolvent company before the commencement of the bankruptcy procedure or theappointment of a bankruptcy administrator. If the creditors and the insolvent company adopt the plan, thebankruptcy proceedings will be suspended and the company will continue its business under thesupervision of the bankruptcy administrator, creditors and bankruptcy judge.
Petitioners for a bankruptcy are usually required to deposit, in advance, a certain amount of money tocover the costs of the bankruptcy procedure (the amount of deposit varies). The deposit will beremunerated later out of the bankruptcy estate including all other expenses of the procedure. Thebankruptcy procedure for banks is somewhat different from the general bankruptcy procedure and isregulated by the FBiH and RS Laws on Banks. The procedure is administered and supervised by theFBiH and RS banking regulators.
The rules regulating arbitration are contained in the entity laws on civil proceedings i.e. Articles 434 - 453of the FBiH Code of Civil Procedure and in Articles 434 – 453 of the RS Code of Civil Procedure. Bothacts are valid for both domestic and international arbitration proceedings; however, for arbitrationproceedings to be classed as international, a foreign element must exist. However, in practice thismethod of dispute settlement is rarely used in BiH.
Arbitration may be initiated only on the basis of a written agreement signed by both parties. Any writtenproof, such as fax, email or postal correspondence is considered sufficient. Furthermore, an arbitrationagreement is considered valid if the respondent does not contest the existence of such an agreement.An arbitration agreement may be part of a contract or contained in a separate document, i.e., in generalterms and conditions which apply to the legal relationship between the parties. There are no specificcontent requirements for an arbitration agreement. However, the agreement should state the parties tothe agreement and the subject-matter of the agreement, plus indicate clearly that a single dispute or alldisputes that may arise from a certain contractual legal relationship will be subject to arbitration.
Generally disputes concerning all commercial transactions may be submitted to arbitration. Claimsinvolving family law and claims under administrative proceedings that cannot be brought before the courtsbut are decided by state agencies are not arbitrable. The parties are free to decide on the language ofarbitration and on the applicable procedural rules that will govern the proceedings and may also decide onthe number and method for selecting the arbitrators. There may only be an odd number of arbitrators.Provided that a foreign element exists, the parties are free to agree on any substantive law.
The applicable legislation does not provide for any specific rules on interim measures in relation toarbitration proceedings.
An arbitral award has the same legal validity and force as a court judgment and is therefore binding andenforceable. It can be challenged only in certain situations prescribed by law. These include:
-the invalidity or ineffectiveness of the arbitration agreement or no arbitration agreement existed;
-the conduct of the proceedings or the rendering of the award were not in accordance with the parties’agreement;
-the award does not contain reasoning or was not signed;
-the award was made in a dispute not falling within the terms of the statement of claim or containsdecisions beyond the statement of claim;
-the reasoning in the award is inadequate or contradicts the findings of the arbitral tribunal; or
-an infringement of BiH public order.
In addition, the Arbitration Court with the BiH Foreign Trade Chamber is established as of 2003 andadministers both domestic commercial disputes, i.e., disputes which involve parties only residing in BiH,and commercial disputes between a party residing in BiH and a party with a foreign residence.
A foreign court judgment can be enforced in BiH only after it has been recognized by the competent BiHcourts. BiH courts will recognize a foreign judgment if the following conditions are satisfied:
-the foreign judgment is legally valid and enforceable in the foreign state where the judgment wasrendered;
-the party against which the judgment was rendered had the right to participate in the proceedings;
-the competent court in BiH has not already decided on the subject matter of the foreign judgmentand/or it has not already recognized a foreign judgment for the same subject matter;
-there is reciprocity of recognition between BiH and the foreign state that rendered the judgment; and
-the subject matter of the foreign judgment is not under the exclusive competence of the BiH courts.
The existence of reciprocity is presumed, until proven otherwise, but in the event of doubt, the court willrequest clarification from the Ministry of Justice (it is common under the current court practice thatfactual reciprocity is required, rather than legal). Also, the foreign award must not contradict the BiHConstitution, the FBiH Constitution or RS Constitution and/or public order.
A foreign arbitral award must also be recognized by the competent BiH courts before it can be enforcedin BiH. The following preconditions must be met for recognition:
-the subject matter of the foreign arbitral award is not exempt from arbitration according to BiH law;
-the subject matter of the foreign arbitral award is not under the exclusive jurisdiction of the BiH courtsor other authorities;
-the foreign arbitral award does not contradict principles set forth in the BiH Constitution, the FBiHConstitution or RS Constitution and/or public order;
-reciprocity of recognition exists between BiH and the country of origin of the foreign arbitral award;
-the relevant parties have concluded a written arbitration agreement and such agreement is valid andbinding;
-the party against which the arbitral award has been rendered was duly informed of the appointment ofthe arbitral tribunal and of the arbitration proceedings and there were no obstacles for such party toparticipate in the arbitration proceedings;
-the composition of the arbitral tribunal and the arbitration proceedings were in accordance with theprovisions of the arbitration agreement and the arbitration rules;
-the arbitral tribunal has not exceeded its authority determined by the arbitration agreement;
-the foreign arbitral award is final and enforceable; and
-the foreign arbitral award is not ambiguous or contradictory.
BiH is a party to the New York Convention on the Recognition and Enforcement of Foreign ArbitralAwards of 1958, with the reservations that the Convention will only be applied to the recognition andenforcement of awards made in the territory of another contracting state, will only be applied todifferences arising out of legal relationships, whether contractual or not, that are considered commercialunder the national law and will only be applied to those arbitral awards which were adopted after theentry into effect of the Convention. In addition, BiH is a party to the 1961 European Convention onInternational Commercial Arbitration.
BiH is also a party to bilateral agreements with various countries that regulate the mutual relationships ofBiH and the respective country in relation to the provision of legal aid, civil and criminal proceedings, etc.
Court fees are based on the canton laws oncourt fees and depend on the amount in dispute.Please note that court fees in FBiH can vary fromcanton to canton.
Examples for Canton Sarajevo:
-If the amount in dispute is up to BAM 1,000(approx. EUR 500): 5% of the amount in dis-pute for lawsuit and judgment, double thatamount for an appeal;
-If the amount in dispute is up to BAM 5,000(approx. EUR 2,500): 4% of the amount in dis-pute for lawsuit and judgment, double thatamount for an appeal;
-For amounts in dispute above BAM 5,000 (ap-prox. EUR 2,500): 3% but not exceeding theamount of BAM 10,000 (approx. EUR 5,000)for lawsuit and judgment, double that amountfor an appeal.
Examples for RS:
-For an amount in dispute between BAM 10,000to BAM 50,000 (approx. EUR 5,000 to EUR25,000): BAM 500 (approx. EUR 250) for law-suit and judgment, double that amount for anappeal;
-For an amount in dispute between BAM 50,000to BAM 100,000 (app. EUR 25,000 to EUR50,000): BAM 1,000 (app. EUR 500) for
lawsuit and judgment, double the amount
for an appeal;
-For amounts in dispute exceeding BAM100,000 (app. EUR 50,000) – 1% but not ex-ceeding BAM 10,000 (app. EUR 5,000) for law-suit and judgment, double that amount for anappeal.
FBiH: Assumptions based on an amount indispute of BAM 1,000,000 (approx. EUR500,000):first instance: preparation of lawsuitBAM 12,600 (approx. EUR 6,300); preparationand presence at preliminary hearing (meetingswith client, witnesses, correspondence with client,etc.) BAM 12,600 (approx. EUR 6,300); prepara-tion and presence at main hearing BAM 12,600(approx. EUR 6,300); in total BAM 37,800 (ap-prox. EUR 18,900); second instance: drafting ap-peal, no hearing: BAM 15,750 (approx. EUR7,875); third instance: one brief, no hearing: BAM18,900 (approx. EUR 9,450).
RS: Assumptions based on an amount in dis-pute of BAM 1,000,000 (approx. EUR 500,000):first instance: preparation of lawsuit BAM 2,000(approx. EUR 1,000); preparation and presenceat preliminary hearing (meetings with client, wit-nesses, correspondence with client, etc.) BAM2,000 (approx. EUR 1,000); preparation and pres-ence at main hearing BAM 2,000 (approx. EUR1,000); In total BAM 6,000 (approx. EUR 3,000);second instance: drafting appeal, no hearing:BAM 3,000 (approx. EUR 1,500); third instance:one brief, no hearing: BAM 3,000 (approx. EUR1,500).
FBiH: Assumptions based on an amount indispute of BAM 10,000,000 (approx. EUR5,000,000):first instance: preparation of lawsuitBAM 52,200 (approx. EUR 26,100); preparationand presence at preliminary hearing (meetingswith client, witnesses, correspondence with client,etc.) BAM 52,200 (approx. EUR 26,100); prepara-tion and presence at main hearing BAM 52,200(approx. EUR 26,100); In total BAM 156,600 (ap-prox. EUR 78,300); second instance: drafting ap-peal, no hearing: BAM 65,250 (approx. EUR32,625); third instance: one brief, no hearing:BAM 78,300 (approx. EUR 39,150).
RS: Assumptions based on an amount in dis-pute of BAM 10,000,000 (approx. EUR5,000,000):first instance: preparation of lawsuitBAM 2,000 (approx. EUR 1,000); preparation andpresence at preliminary hearing (meetings withclient, witnesses, correspondence with client,etc.) BAM 2,000 (approx. EUR 1,000); prepara-tion and presence at main hearing BAM 2,000(approx. EUR 1,000); In total BAM 6,000 (approx.EUR 3,000); second instance: drafting appeal, nohearing: BAM 3,000 (approx. EUR 1,500); thirdinstance: one brief, no hearing: BAM 3,000 (ap-prox. EUR 1,500).
Yes. There is legal aid available to those who cannot afford the costs of legal proceedings.
Yes. Documents are subject to disclosure. If a party itself referred to the document in the course of
the proceedings, the party is obliged to hand the document over by substantive law or the documentis qualified as a "joint deed" between the parties. A court order to produce such documents is notenforceable. Failure to comply with the order can only be considered by the court in its evaluation
of the case.
The court may, however, order a third party to disclose certain documents if such party is obliged todisclose it by substantive law, or the document is qualified as a “joint deed” between such third party anda party to the proceeding that initiated the disclosure. Such order can be enforced in accordance with theLaw on Enforcement Proceedings.
Simple cases in both FBiH and RS:firstinstance: 1 to 2 years; second instance: 6 monthsto 2 years; third instance: 1 to 2 years.
Complex cases in both FBiH and RS:firstinstance: 2 to 5 years; second instance: 1 to 3years; third instance: 1 to 3 years.
-Duration and costs of standard civilproceedings initiated before the first instancecourts in FBiH/RS differ to a great extent frommunicipality to municipality and usually dependon practice and backlog of cases at therespective court.
-Litigation costs include court fees, attorneyfees and expenses (e.g. expert opinions, travelexpenses for witnesses).
-Court taxes in the first and second instancesare to be paid by the party filing the statementof claim or the appeal.
-Litigation costs are awarded against the losingparty who must reimburse the winning party.However, the losing party will only reimburse theminimum amount in accordance with therelevant regulation, regardless of the amountagreed between the winning party and itsattorney which may be significantly higher. Theactual attorney fees of a party (depending onthe fee agreement between attorney and client)may thus be substantially higher, but are of norelevance to the opposing party.
-If a claimant has been partially successful, thecosts of both sides are divided on a pro-ratabasis.
-Agreements on Quota litis are generallyprohibited for BiH lawyers in all types ofproceedings.
-It should be noted that in FBiH, there is a limitimposed by the parliament as to the amount thatcan be charged by an attorney for a singleaction (preparation of lawsuit, representation ata hearing, etc.). This amount corresponds to theaverage salary in FBiH, which is currentlyaround BAM 800 (approx. EUR 400).
-The actual attorneys' fees may be higher(depending on the agreement with the client),but this has no influence on the obligation ofthe losing party to reimburse the costs to thewinning party.
There are no civil jury trials in BiH.
Limited. The FBiH Law on Civil Proceeding does not provide for a special proceeding for collectiveredress. Traditional tools of multiparty practice such as joinder and consolidation of proceedings areapplied. Consumer organizations often have similar claims of several consumers assigned to them andmay file one complaint.
Apart from the traditional tools of multiparty service, the latest amendments of the RS Law on CivilProceedings introduced a possibility of collective redress. In particular, associations, authorities, institutionsor other organizations organized under the relevant laws, which are established for the protection of legallydefined collective rights and interests of citizens, can file a claim for the protection of such rights and claimsto the competent court. These rights can be interests related to environment protection, moral, ethical,consumer or antidiscrimination and other rights which are defined by the relevant laws and that can beharmed or jeopardized by a business activity or by a general action. The claim may be filed against anatural person or a legal entity that, by performing a certain commercial activity or by acting (radom) or notacting, severely harms or jeopardizes the relevant collective rights and interests.
No. The representation by a counsel is not mandatory in civil proceedings.
Yes. During the investigation, the defence attorney may review the documents and any obtained objectswhich are in favour of the suspect. The attorney can be denied this right in case the disclosure can jeopar-dize the purpose of the investigation.
Upon raising the indictment, the accused and the attorney may access all files and evidence.
The judge or the panel of judges and the prosecutor are obliged to provide the defence attorney with ac-cess to any new evidence, information or facts that they have obtained and which can serve as evidencein the course of main hearing.
No. There are no jury trials in BiH.
If the requirements for mandatory defence havenot been met and if the accused cannot bear thecosts of counsel representation, the court willappoint a counsel ex officio in the followingsituations:
-if the procedure concerns a criminal offensepunishable with imprisonment of three years ora criminal offense punishable with a severepenalty; or
-if the interest of equity require so, irrespective ofthe type of punishment.
Although the BiH, FBiH, RS and BD criminal pro-cedure codes provide for relatively quick courtproceedings, depending on the backlog of pend-ing cases before the relevant courts and the cir-cumstances of a given case, in practice criminalprocedures may last for at least one year, with theexception of certain aspects of the criminal proce-dure, such as the procedure of issuance of war-rant for the pronouncement of a sentence(kazneni nalog), or the procedure for admission ofguilt and plea bargaining.
No. Class actions are not possible in criminal proceedings.
Pro Bono System
According to FBiH and RS law, the costs forcriminal procedures typically include attorneys’fees, detention costs, remuneration for expertsand witnesses, translation expenses, etc.
The court determines and sets out the amount ofcourt fees in the court judgment for each individ-ual case.
If the accused is found guilty, it will bear all costs ofthe procedure. On the other hand, if the accused isfound not guilty, the costs of the procedure areborne by the state/entity's/district budget.
FBiH: Assumptions based on the criminalprocedure before a sole judge of amunicipality court.
Investigation procedure: representation of thesuspect during questioning: BAM 300 (approx.EUR 150) for the first hour and BAM 60 (approx.EUR 30) for every following hour of the question-ing; participation as defense attorney in the activ-ities pertaining to collection of evidence (e.g.search of an apartment, facilities, persons, etc.):BAM 150 (approx. EUR 75) for the first hour andBAM 60 (approx. EUR 30) for every followinghour of the evidence activities; participation asdefense attorney in the investigation procedure:BAM 60 (app. EUR 30) per hour.
First instance: objection to the indictment: BAM300 (approx. EUR 150); representation of the ac-cused: BAM 300 (approx. EUR 150); in caseswhen the main hearing lasts longer then one day,the attorney is entitled to BAM 300 (approx. EUR150) for the first day of the hearing and 50% ofthe fee for the second and every following day ofthe main hearing and BAM 60 (approx. EUR 30)per hour from the second hour onwards of themain hearing.
Second instance: defense of the suspect before apanel of judges in second instance; BAM 900 (ap-prox. EUR 450); drafting an appeal: BAM 300(approx. EUR 150).
RS: Assumptions based on the criminal pro-cedure before a sole judge of the basic court:
Investigation procedure: for participation in the in-vestigation procedure, plea bargaining and ad-mission of guilt: BAM 200 (approx. EUR 100).
First instance: for drafting petitions upon confir-mation of the indictment and during the mainhearing: BAM 100 (approx. EUR 50); objection tothe indictment: BAM 150 (approx. EUR 75); de-fense of the accused and representation of theaccused at the main hearing: BAM 200 (approx.EUR 100).
Second instance: for drafting an appeal:
BAM 150 (approx. EUR 75).
In FBiH: in particularly complex cases, for attor-neys appointed by the court, the court will ap-prove a lump sum exceeding the attorneys' feesdefined by the FBiH Attorneys' Tariff.
In RS: attorneys' fees can be increased up to100% if, inter alia, the case requires special ex-pertise or specialized knowledge or if the case isparticularly complex.
It is mandatory that the accused is represented bya defence attorney:
-if he/she is a minor;
-at the time of the first questioning,
if he/she is deaf or mute;
-if he/she is a suspect of a criminal offense that ispunishable with a
-after the court determined detention before atrial and during such a detention;
-when the indictment is delivered, if theindictment has been raised for a criminal offensepunishable with ten years of imprisonment, or fora criminal offense punishable with a severepunishment.
Preliminary Injunction Proceedings
-The preliminary injunction can be proposedbefore the start, during and upon completion ofthe court proceedings until enforcement isfinished.
-With the request for a preliminary injunction theapplicant must provide available evidence, e.g.,documentary evidence and affidavits that canbe examined by the court right away. Foreignlanguage documents should be presented witha translation into one of the official languages ofBiH (Serbian, Bosnian or Croatian).
-The applicant must advance the costs of thepreliminary injunction proceeding, if the requestfor preliminary injunction is applied for outsideof a main proceeding.
-The court will decide who will bear the costs ofthe preliminary injunction proceeding, if therequest for a preliminary injunction is applied forduring the civil proceeding.
-The court may order the applicant to pay asecurity deposit.
Example for Canton Sarajevo: 50% of the courttax for the regular civil proceeding, but cannotexceed BAM 1,000 (approx. EUR 500) both forthe motion and the court’s decision.
Example for RS: 50% of the court tax for theregular civil proceeding.
In FBiH: 75% of the fees that would be chargedby the attorney for actions in a standard civilproceeding (which depend on the amount indispute); the same is true for the motion,response to the motion as well as representationat any hearings in relation to the preliminaryinjunction.
In RS: Same as in civil proceedings.
Resolutions on preliminary injunctions aregenerally rendered within a period of 2 – 12months. The procedure is generally more efficientin family matters.
-Institutional arbitration is regulated by theArbitration Rules of the Arbitration Courtattached to the Foreign Trade Chamber of BiH(adopted in 2003).
-Until now, only a very limited number ofarbitration proceedings have been initiated andrealized before the Arbitration Court.
Yes. According to the Arbitration Rules of the Arbitration Court attached to the Foreign Trade Chamberof BiH, the plaintiff and the defendant are required to, in their claims and in response to claims, state andprovide all documents supporting their statements.
Arbitration proceedings are seldom used in BiHand the practice is very limited. Therefore, it isvery difficult to give any estimates as to theduration, costs and other matters relevant forarbitration proceedings.
The procedural costs depend on whether a solearbitrator or an arbitral tribunal is appointed. Thefollowing estimates are based on the proceduralcosts of the Arbitration Rules of the ForeignTrade Chamber of BiH.
Assumption: sole arbitrator appointed and anamount in dispute of EUR 1,000,000:Administrative costs: EUR 3,060; fee for a solearbitrator: EUR 10,200. In total: EUR 13,260.
Assumption: sole arbitrator appointed and anamount in dispute of EUR 10,000,000:Administrative costs: EUR 9,480; Fee for a solearbitrator: EUR 31,600. In total: EUR 41,080.
In case of an arbitral tribunal, the arbitrators’costs will be multiplied by the number ofarbitrators, minus 20%.
According to the FBiH Attorney's Tariff,attorneys' fees for all actions in arbitrationproceedings are the same as the fees in standardcivil proceedings. When representing a client ininternational arbitration proceedings, the attorneyis entitled to double the amount of fees applicablein standard civil proceedings.
According to the RS Attorney's Tariff, draftingsubmissions and representation at the hearing:BAM 500 (approx. EUR 250).
According to the BiH Law on Conflict of LawRules, the following must be submitted alongwith the motion for recognition/execution of aforeign judgment or arbitral award:
-original or certified copy of the foreignjudgment or foreign arbitral award for whichrecognition is sought, including certificationfrom the competent authority that the awardbecame legally valid and binding under thelaw of the country where the award wasrendered;
-official translation of the foreign judgment orthe foreign arbitral award; and
-proof that the court fee has been paid.
The same documents must be submitted with amotion for recognition and enforcement of aforeign arbitral award under the New YorkConvention for Recognition and Enforcement ofForeign Arbitral Awards.
Enforcement of Foreign Judgments and Arbitral Awards
Canton Sarajevo: BAM 100 (approx. EUR 50)for the motion for recognition; BAM 200 (approx.EUR 100) for appeal; fees for the court’s decisiondepend on the amount in dispute and arecalculated in the same way as in civilproceedings.
RS: BAM 200 (approx. EUR 100) for the motionfor recognition, while the court fees for an appealare BAM 300 (approx. EUR 150).
Under the FBiH Attorneys' Fees application forthe recognition of foreign judgments and arbitralawards: 50% of the fees that would be chargedby the attorney for actions in standard civilproceedings. Attorneys’ fees for all actions inenforcement proceedings are the same as thefees in standard civil proceedings.
Under the RS Attorneys' Fees application forthe recognition of foreign judgments and arbitralawards and representation at the oral hearing (ifapplicable): BAM 375 (approx. EUR 180).Attorneys' fees for all actions in enforcementproceedings are the same as the fees in thestandard civil proceedings.
Up to one year, if appealed even longer. Theprocedure is generally more efficient in familymatters.
Canton Sarajevo: filing BAM 100 (approx. EUR 50); for appeal against the court decision: 1% of thevalue of the claim but never less than BAM 100 (approx. EUR 50) or more than BAM 10,000 (approx.EUR 5,000).
RS: filing: BAM 100 (approx. EUR 50); appeal against the court decision: 1% of the value of the claimbut never less than BAM 100 (approx. EUR 50) or more than BAM 10,000 (approx. EUR 5,000).
FBiH: the fees for filing the motion for opening of the insolvency proceedings are the same as instandard civil proceedings. Other actions are generally charged at 50% of the fees for standard civilproceedings.
RS: the fees for filing the motion for opening of the insolvency proceedings are the same as instandard civil proceedings.
In case of insolvency of a company, either the company itself or any person/entity with legal interest(e.g. a creditor whose claims are accrued and unsettled), is entitled to file a petition for bankruptcyproceedings. In the relevant court practice and legal theory, a third party is not entitled to seek theopening of bankruptcy proceedings, if such party can recover its debt through a less burdensomeprocess. Accordingly, it can be considered that a secured creditor does not have the necessary legalinterest in initiating bankruptcy proceedings if the creditor has an enforceable title over the collateral.However, if a secured creditor proves that its claims would not be fully settled from the value of thecollateral in the course of the enforcement proceedings, it would generally be considered that suchcreditor has the necessary legal interest in initiating bankruptcy proceedings.
1 year to several years. In very complex cases, a duration of more than 10 years is possible.