1. LEGAL SYSTEM

On 25 June 1991, following its secession from the former Yugoslavia, the Republic of Slovenia adopted the Constitutional Decision on Sovereignty and Independence. The Constitution set forth the legal foundations and structure defining the legal system and the legal entities of the new state. The old Yugoslavian laws remained in effect, as long as these were not in contradiction with the new Slovenian constitution.

The Slovenian judicial system is organized according to the principle of hierarchy. The uniform judicial system of the Republic of Slovenia includes courts of general and specialized jurisdiction; the latter having jurisdiction only in the areas of labour, social law and administrative law. Generally, in the first instance, the Municipal Courts and District Courts decide multiple types of cases, involving both civil and criminal matters. Additionally, the four Labour Courts and one Social Court operate as specialized courts at a level equal to a District Court and hear disputes in the first instance concerning most labour and social matters.

Generally, appeals can be made from a court of first instance to the second instance courts which are the Appellate Courts (i.e. Higher Courts), which have jurisdiction to decide appeals from the lower courts. In limited situations, an appeal in the third instance can be made to the Supreme Court of the Republic of Slovenia. However, these are extremely rare.

The Slovenian legal system also has a Constitutional Court which operates as a court of extraordinary jurisdiction. The Constitutional Court is an autonomous and independent state authority. It is the highest judicial body responsible for protecting the Slovenian Constitution by exercising its constitutional authority to review and protect constitutional rights, and to ensure the legality of state actions.

In 1999, a new Civil Procedure Act (Zakon o pravdnem postopku), governing legal proceedings in Slovenian Courts was enacted. Since its coming into force on 15 July 1999, the Civil Procedure Act has been amended numerous times; the most recent amendments introducing some new procedural instruments (e.g. cascade lawsuit) came into force on 14 September 2017.

According to the Slovenian Constitution, court decisions are generally not viewed as precedents and judges are under no legal obligation to follow the legal interpretation of the higher courts. However, lower courts generally do tend to follow the opinions of the higher courts and the Supreme Court.

In the first instance, Municipal Courts are competent to decide on cases punishable either by fines or by up to 3 (three) years imprisonment and civil disputes where the amount in dispute is under EUR 20,000. Municipal Courts also monitor, maintain and administer the land registers.

Regardless of the amount in dispute, the Municipal Courts are vested with jurisdiction over the following matters:

-minor criminal cases, excluding penal acts of slander or libel, that are committed by the press, radio or television or through any other means of mass media;

-civil cases concerning claims for damages or property rights up to a certain value;

-cases concerning execution and security;

-all civil cases concerning easements, trespass (of land), lease or tenancy relations;

-legal obligations regarding maintenance/alimony, if the matter is not dealt with in conjunction with marriage disputes or disputes over the establishment or contestation of paternity; and

-probate or other non-litigious matters, land registers, and civil enforcement.

Currently, there are 44 Municipal Courts established in Slovenia.

District Courts are competent to decide on cases punishable by more than 3 (three) years imprisonment and civil matters where the amount in dispute exceeds EUR 20,000. In addition, District Courts are vested with jurisdiction over the following:

-criminal and civil cases which exceed the jurisdiction of municipal courts;

-juvenile criminal cases;

-execution of criminal sentences;

-family disputes, excluding maintenance/alimony;

-confirmation of rulings of a foreign court;

-commercial disputes;

-bankruptcy, forced settlements and liquidation;

-copyright and intellectual property cases; and

-the District Courts, whose competence includes the sea-territory of the Republic of Slovenia, in cases concerning ships and navigation on the sea, exploitation of the sea and the sea floor and cases which demand the use of maritime law.

The 11 District Courts currently established throughout Slovenia are also responsible for monitoring and administering the commercial register.

The Labour Court and Social Court have the position of a District Court and have jurisdiction to rule only on matters expressly provided by law, since the law determines the presumption of jurisdiction of courts of ordinary jurisdiction.

The four Slovenian Higher Courts function as courts of appeal over judgments made by the Municipal and District Courts. In addition to the determination of appeals against decisions of the Municipal and District Courts in their territories, they also determine disputes of jurisdiction between Municipal and District Courts. Two further specialized courts, the Administrative Court and the Higher Labour and Social Court, also have the rank of courts of appeal. The Higher Labour and Social Court serves as an appeals court against first instance judgments in labour and social disputes. The Administrative Court is competent to decide matters concerning the judicial protection of the rights and legal interests of physical persons and legal entities in connection with decisions and actions of administrative bodies and other public authorities. The authority of the Administrative Court includes the authority to review the legality of the decisions and actions of the various administrative bodies and public authorities.

At the top of the judicial hierarchy is the Slovenian Supreme Court. It functions primarily as a court of cassation. It acts as a court of appellate jurisdiction in criminal and civil cases, commercial lawsuits, cases of administrative review and labour and social security disputes. It is the court of third instance in almost all cases within its jurisdiction. The grounds for appeal to the Supreme Court (defined as extraordinary legal remedies), are limited to issues of substantive law and breaches of procedure. In addition to administering justice, the Supreme Court also determines most jurisdictional disputes between the lower courts, grants the transfer of jurisdiction to another court in cases provided by law, and keeps records of the judicial practice of courts.

Most court decisions issued by the Supreme Court or the Higher Courts are published and made available online.

The main novelties introduced into civil proceedings as of 14 September 2017

One of the real novelties of the amended Civil Procedure Act is the mandatory programme for managing proceedings (program vodenja postopka), which shall be carried out by the judge after consultation with the parties at the initial preparatory hearing. Furthermore, parties are, in absence of court's express summons, limited to two preparatory filings each before the first ("preparatory") hearing takes place. A new type of lawsuit – the cascade lawsuit (stopničasta tožba) - has been introduced. This has proven to be a useful instrument in many foreign national legislations. The new type of lawsuit will give a party the possibility to combine two claims; the second one being subsidiary to the first and undetermined and unreasoned at the beginning of the procedure. The determination and identification of the second claim is dependent on the court's decision on the first claim of the party. The party however has to specify in detail the second claim and state its reasoning (by providing facts and evidence) only after the decision on the first claim becomes final, but within the court's given timeline.

Finally in commercial litigation appellate procedures the courts now have the new possibility to give prior notification to the appellant that its appeal does not have any chance of success. Such notification can be issued, if the senate of judges unanimously so decides and the appeal is obviously groundless, providing that the decision is not essential for the establishment of legal certainty and/or uniformity of jurisprudence on the subject. The party is given the possibility to withdraw its appeal and in the event of the latter, the court returns a part of the court fees.

While business crimes represent only approximately 15% of all detected crimes, the damage caused by these crimes amounts to approximately 80% of all damage caused by criminal activity in the country. This development is reflected in the creation of specialized authorities competent for the investigation and prosecution of complex crimes.

Legal entities can be held liable for criminal offences, together with or independently of the responsible physical persons (usually management). The penalties for legal entities found guilty of a criminal offence range from pecuniary penalties to the cessation of the legal entity, if the entity was mainly used for the purpose of committing criminal offences. Criminal procedure against a legal entity is usually combined with the legal procedure against the responsible person of the legal entity.

A complaint that a crime has been committed can be made or transferred to the competent public prosecutor, either before or after the police have collected the evidence they deem to be relevant for the proceedings. After that the public prosecutor will either:

-dismiss the complaint if it deems the evidence to be insufficient; or

-in case of crimes with a maximum statutory penalty of up to 3 (three) years: bring a charges proposal (obtožni predlog); or

-in case of all other crimes: bring formal charges without an investigation or request that the investigative judge conducts an investigation.

After the public prosecutor has brought a charges proposal or formal charges and the indictment becomes final, a pre-trial hearing usually takes place in which the accused makes a statement regarding his or her guilt.

The main trial is public. The criminal procedure is, in principle, inquisitorial, which means that the trial is led by the judge, who is seeking to establish the material truth. After the trial, the verdict and - if applicable - the penalty is delivered orally and publicly. The court has 15 (fifteen) days to prepare a written verdict, which is served to all parties in the proceedings, and, where applicable, the victim and the injured parties.

Each first instance verdict can be appealed within 15 (fifteen) days after service of the judgment. The public prosecutor can appeal in favour as well as to the detriment of the accused. A non-appealed judgment becomes final. A second instance judgment becomes final upon its delivery, unless

-the highest penalty has been pronounced (30 (thirty) years or life-long imprisonment);

-the appeals court reached its verdict based on different facts than the first instance court; and

-the appeals court convicted the accused after the first instance court acquitted him/her.

In these three instances, the parties have the right to file an appeal to the Supreme Court.

Extraordinary remedies are also available to a limited scope.

The National Investigation Bureau, a specialized unit of the police, was established in 2009. It is responsible for the investigation of crimes, which demand the co-operation of various state offices, complex crimes the investigation of which requires specialized knowledge, crimes with an international element, crimes that have gravely harmed state finances or that have led to high illegal monetary gains and crimes allegedly committed by public officials. Despite the specialization of the National Investigation Bureau, it remains subordinate to the prosecutors and investigative judges in the same way as other police units in the country.

Several district prosecution divisions (okrožna državna tožilstva) have prosecutors which are solely responsible for business crime. In November 2011 a specialized public prosecution division was also formed and is responsible for the prosecution of organized crime, terrorism, corruption and other complex crimes.

The public prosecutor may authorize the secret observation of a person. When more intrusive methods are used (video or audio recording) or if they are used against people, who are not suspects, only the investigative judge can authorize this. There are statutory maximum time limits for secret observations.

The public prosecutor may authorize the fake giving and receiving of gifts and the fake giving and receiving of bribes.

The investigative judge may further authorize the monitoring of a suspect's financial data/activity, his/her communication data, including monitoring of computer systems, eavesdropping and observations with technical devices and entry into foreign premises. These investigative methods are limited to certain crimes, including certain business crimes.

The police may detain a suspect for up to 48 (forty eight) hours. After that (and sometimes even before) the investigative judge needs to authorize detention.

The public prosecutor may steer the work of, inter alia, the police, as well as bodies dealing with taxes, customs, financial operations, shares, competition, money laundering, corruption, drugs and inspections, with binding instructions, expert opinions and suggestions for collecting data and other measures within their competence, in order to find the suspect and to determine whether the suspect shall be prosecuted.

The public prosecutor is authorized to conduct plea-bargaining with the alleged perpetrator, with a mandatory legal assistance of attorney.

In case an indictment becomes final, the criminal proceedings continue as outlined above.

During the investigation of crimes, which are prosecuted ex officio, the victim can give suggestions regarding evidence to be collected in order to identify a crime, its perpetrator and to determine the sum of the victim's (civil) indemnification claim.

During the trial, the victim can suggest evidence and put questions to the accused, witnesses and experts. The victim is, subject to limitations applicable when he/she is also a witness, allowed to consult the file and evidence.

If the public prosecutor discontinues the investigation or prosecution of a crime that is prosecuted ex officio, he or she must inform the victim, who can then prosecute in his/her own name. At trial, the victim can bring an indemnification claim. If the accused is found guilty, the criminal court can recognize the entire claim or recognize the claim in part or refer the victim to the civil court. The civil court is bound by a criminal court's finding of guilt. The victim can also approach the civil court if the accused is found not guilty, since the civil court is not bound by an acquittal in criminal proceedings.

The available statistics combine all criminal proceedings. The majority of cases at the first instance take between 1 (one) and 2 (two) years. More than half of the cases at the second instance take less than 3 (three) months.

The costs for proceedings include expenses for witnesses, costs of external viewings, fees and expenses of experts, interpreters and professionals, transportation expenses for the accused, costs incurred in investigating the accused or the arrested person, transportation and travel expenses for officials, medical expenses for the accused while in detention and expenses for child delivery, court tax, fees and necessary expenses for defence counsel, necessary expenses for the private prosecutor and the injured party acting as prosecutor and for their representatives, necessary expenses of the injured party and his/her legal representatives, and the fees and expenses of those.

The Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act (Zakon o finančnem poslovanju, postopkih zaradi insolventnosti in prisilnem prenehanju, hereinafter the "Insolvency Act") governs insolvency in Slovenia and was enacted in 2007. Since coming into force on 15 January 2008, the Insolvency Act has been amended numerous times, the most recent amendments having entered into force on 22 October 2016.

The Insolvency Act governs: (a) the financial operations of companies; (b) pre-insolvency and insolvency proceedings; (c) cross-border insolvency proceedings; and (d) proceedings of compulsory dissolution (compulsory liquidations and the deletion of a company from the court's registry without liquidation). The majority of the provisions of the Insolvency Act on insolvency proceedings apply to legal persons although the compulsory settlement rules also apply to sole entrepreneurs. In addition, there are also provisions in the Insolvency Act dealing with the insolvency of a natural person and the insolvency of an estate.

Pre-Insolvency and Insolvency Proceedings

In May 2013, amendments to the Insolvency Act introduced a so-called simplified compulsory settlement (postopek poenostavljene prisilne poravnave), which is available only to micro and small companies as well as small sole entrepreneurs. These proceedings enable companies to negotiate and agree on conditions for repayment of their debt directly with their creditors instead of through formal court proceedings.

The rules regarding personal bankruptcy proceedings apply in cases of bankruptcy of natural persons, including independent business persons, self-employed persons and consumers. During personal bankruptcy proceedings the debtor may request remission of the claims against the debtor.

In November 2013, the amendments to the Insolvency Act introduced the possibility of preventive financial restructuring (postopek preventivnega prestrukturiranja) that can be initiated by a debtor, which is (a) a middle-sized or large company; and (b) still solvent, but is likely to become insolvent within a year. Preventive restructuring covers only financial claims. In addition, there are two kinds of insolvency proceedings for legal persons under the Insolvency Act:

-Compulsory settlement (postopek prisilne poravnave), in which the debtor undergoes financial reorganization and can be released from parts of its debts. To initiate a compulsory settlement, a debtor needs to show that creditors will be repaid under better conditions than they would have been if bankruptcy proceedings are initiated.

-Bankruptcy proceeding (stečajni postopek), which aims at the dissolution of the debtor, sale of the debtor's property and distribution of proceeds among the creditors.

Assumptions of Insolvency

Statutory assumptions of insolvency of a debtor are:

-Insolvency shall be the situation where the debtor:

-within a longer period of time is not able to settle all its liabilities falling due within such a period of time; or

-becomes insolvent.

-Unless it is proven otherwise, a debtor shall be considered continuously insolvent:

-if it is a legal entity, entrepreneur or individual and:

-the debtor is more than 2 (two) months in arrears with the payment of at least 20% of the debt shown in its last published balance sheet; or

-the funds of the debtor's bank account(s) do not suffice for a fulfilment of enforcement orders for at least 60 (sixty) days without interruption or for 60 (sixty) out of 90 (ninety) days; or

-the debtor has no bank account in Slovenia and did not fulfil its obligations under an enforcement order for more than 60 (sixty) days.

-if it is subject to a confirmed compulsory settlement or simplified confirmed compulsory settlement and is in default with its obligations for more than 2 (two) months:

-by paying its obligations on the grounds of confirmed compulsory settlement or simplified compulsory settlement; or

-by paying its obligations to creditors with the rights to separate settlement, which occurred before the beginning of the proceeding of compulsory settlement or simplified compulsory settlement; or

-by carrying out other financial restructuring measures, which are set out in the financial restructuring plan.

-if he/she is a consumer and:

-Is delayed for more than 2 (two) months in meeting one or more liabilities in the total amount exceeding three times the amount of his/her salary, compensation or other remunerations received in a regular manner in periods not longer than 2 (two) months; or

-Is unemployed and does not receive any other regular remunerations and is delayed in meeting his/her liabilities for more than 2 (two) months, in an amount exceeding EUR 1,000.

-Unless proven otherwise, a debtor shall be considered insolvent if:

-the value of its assets is smaller than the sum of its liabilities; or

-the debtor's loss for the current financial year, together with the loss brought forward, exceeds half of the registered capital and this loss cannot be covered from net profit/reserves.

-The debtor is late with the payment of employees' salaries up to the amount of the minimum salary or with the payment of taxes and deductions from those salaries for more than 2 (two) months.

-The debtor is subject to a confirmed compulsory settlement or simplified compulsory settlement, which was finished with a final confirmation of compulsory settlement or simplified compulsory settlement, applies, if not proven otherwise.

Commencement of Insolvency Proceedings, Challenge of Debtor's Transactions and Liability of Shareholders

The debtor is required to initiate insolvency proceedings after insolvency occurs. The debtor may propose compulsory settlement if it provides proof that: (a) the financial restructuring activities will abolish the causes of insolvency; and (b) the creditors will achieve satisfaction of their claims against the debtor, with equal treatment of all creditors' claims under better conditions than in case of bankruptcy proceedings. After the court renders a decision for the commencement of proceedings, the management of the company is required to deliver to the court a report regarding the company's financial restructuring plan and payments of the claims to the creditors on a regular basis.

The rights of creditors to initiate insolvency proceedings have been gradually expanded. If the debtor is insolvent, the creditors are entitled to file for bankruptcy proceedings. In addition, the latest amendments to the Insolvency Act introduced specific rules for medium-size and large companies that allow creditors having at least 20% of all financial claims against the debtor to initiate a compulsory settlement. The Public Guarantee and Maintenance Fund of the Republic of Slovenia is also entitled to file a bankruptcy petition on the basis of employees' claims against the insolvent debtor if the debtor is more than 2 (two) months late with its payments. Both bankruptcy and compulsory settlement proceedings can be initiated also by a personally liable shareholder of the debtor.

Within 6 (six) months after the commencement of bankruptcy proceedings the bankruptcy administrator and the creditors are entitled to challenge the validity of transactions for remuneration, entered into by the debtor within the last 12 (twelve) months prior to the filing of a bankruptcy petition and until the commencement of bankruptcy proceedings. In 2013, the period for the contestation of validity of gratuitous transactions was extended from 12 (twelve) to 36 (thirty six) months prior to the filing of a bankruptcy proposal. A challenge is possible if the consequence of the transaction resulted in a diminishment of the assets available to meet creditors' claims in the bankruptcy and/or if as a result of the transaction an individual creditor gained a more favourable position than other creditors.

The Insolvency Act contains also a provision determining that the deletion of a company from the Court Register does not affect the right of the creditors of the deleted company to claim repayments from the shareholders of the company on the basis of the rules on the piercing of the corporate veil. A creditor may also claim damages from the management or supervisory board of the company, even after the company has been removed from the court register.

The Main Novelties Introduced Into Insolvency Proceedings

According to Article 221.j the creditors’ can adress a proposal for instituting compulsory settlement proceedings against the debtor which, according to Article 55 of the Slovenian Companies Act (ZGD-1), meets the criteria of a medium or large company. In this context, the issues surrounding the following topics are addressed: the formation of a creditors’ committee in the compulsory settlement proceedings, appointment of the debtors’ authorised representative, casting votes in the compulsory settlement proceedings and the delegation of powers to manage the debtors’ business to creditors.

Briefly the main novelties introduced into insolvency proceedings by the amending act to the Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act ZFPPIPP-F, whose primary purpose was to enable the framework for the restructuring of the Slovene economy. The amending Act raises some questions that might arise in the practice of insolvency proceedings and which will have to be decided in the courts’ case-law.

In 2008 Slovenia enacted the new Slovenian Arbitration Act (Zakon o arbitraži) which reflects the UNCITRAL Model Law, including the recommendations adopted by UNCITRAL in 2006 concerning the written form requirements of arbitration agreements and interim measures of protection.

The Arbitration Act (Act) regulates various types of arbitral proceedings when the seat of arbitration is within the territory of the Republic of Slovenia. Specifically, this means that the provisions of the Act are applicable to commercial as well as to non-commercial disputes which can be resolved through arbitration. The Arbitration Act applies both to domestic disputes and disputes involving international elements. The provisions of the Act shall apply to all types of arbitral proceedings, regardless of whether the arbitration is conducted under the auspices of an arbitration institution or by an ad hoc tribunal.

In Slovenia, there is one notable permanent arbitral institution attached to the Slovenian Chamber of Commerce of Slovenia (Gospodarska zbornica Slovenije) – the Ljubljana Arbitration Centre, as well as specialized arbitration courts attached to certain institutions, notably the largest Slovenian insurer (Zavarovalnica Triglav d.d.), and the Ljubljana Stock Exchange.

The Ljubljana Arbitration Centre is an autonomous and independent institution acting as the central arbitral institution in the Republic of Slovenia and administers disputes for both the domestic and international business communities through arbitration or other forms of ADR. New modern arbitration rules have entered into force on 1 January 2014, which brought the centre into line with other big regional and global institutions.

The Act requires that the arbitration agreement entered into by the parties be in writing. It can be a separate agreement or form part of another agreement. An arbitration agreement is deemed to be in writing if it is concluded between the parties by way of an exchange of letters, facsimiles or telexes or by such other means of telecommunication which produces a permanent record of the agreement. It is also considered to be in writing if it is sent from one party to the other or by a third person to both parties and if no objection was raised in good time. An arbitration agreement is also valid if a bill of lading contains an express reference to an arbitration clause in a charter party. It will also be deemed to be in writing if one of the parties states in its statement of claim that an arbitration agreement was entered into between them, and the other party does not deny this in its statement of defence at the latest.

Further, the Act allows the parties to agree that all previous or future disputes arising out of the parties’ contractual or non-contractual relationship shall be settled through arbitration. Generally all pecuniary claims are arbitrable, as well as any other disputes in respect of which parties are allowed to settle. Disputes regarding personal status, e.g., marital disputes and adoption or parental issues, are not arbitrable. In addition, claims that would normally be decided by regulatory or supervisory authorities such as patent, trademark or antitrust disputes are not arbitrable.

The parties are free to agree on the substantive law, the procedural rules, the seat, language, number of arbitrators and their method of appointment, and other aspects of arbitration.

Unless otherwise agreed by the parties, an arbitral tribunal may, upon request of the other party, order such interim or protective measures against a party as the arbitral tribunal may consider necessary in respect of the subject matter of the proceedings. The party that has requested such measures may also apply to the competent national court for the enforcement of such measures. It is not incompatible with an arbitration agreement for a party to apply to the state courts before or during arbitration proceedings for an interim measure of protection or for a court to grant such claim.

Arbitral awards are considered final and binding upon the parties involved in the arbitration, and an arbitral decision possesses the same effect and validity as a judicially imposed judgment. In general, a domestic arbitral award may be challenged (setting-aside proceedings) before the District Court in Ljubljana, on the following grounds:

-the party concluding the arbitration agreement had no legal capacity or capacity to act;

-the arbitration agreement is not valid under the law to which the parties have subjected it, or failing such indication, under Slovenian law;

-a party was not given proper notice of the appointment of the arbitrator(s), or of the arbitral proceedings or was otherwise unable to present its case;

-the award was made in a dispute not falling within the terms of the statement of claim or contains decisions beyond the scope of the statement of claim;

-incorrect composition of the arbitral tribunal or the proceedings were not in accordance with the parties’ agreement;

-the subject matter of the dispute is not arbitrable under Slovenian law; or

-the award is in conflict with the rules of Slovenian public order.

The recognition and enforcement of foreign judgments in Slovenia falls within the bounds of EU Regulation No. 1215/2012 ("Brussels I Bis Regulation"), EU Regulation No. 2201/2003 ("Brussels II Bis Regulation"), and EC Regulation No. 805/2004 ("European Enforcement Order for uncontested claims").

In the event that the said EC Regulations do not apply (because the parties are not from the EU or the subject matter is not covered by the scope of application of the Regulations), the procedure for recognition and enforcement of foreign judgments will be made in accordance with the applicable provisions of the Slovenian Private International Law and Procedure Act (Zakon o mednarodnem zasebnem pravu in postopku).

According to the Slovenian Private International Law and Procedure Act, a party seeking the recognition and enforcement of a foreign judgment must submit a request for recognition to the competent court in Slovenia. The request must include the original judgment or a certified copy, a certificate of finality of the judgment or a certified copy, and a certified translation of the judgment into Slovenian or another official language recognized by the Slovenian Courts.

Generally, the recognition or enforcement of the foreign judgment will not be granted if, upon objection of the party against which the foreign decision was issued, the court finds that:

-the due procedural rights of the individual against whom the enforcement is sought were breached;

-the subject matter of the judgment falls within the exclusive jurisdiction of the Slovenian courts;

-the jurisdiction of the foreign court was based solely on the nationality of the claimant, or on the assets of the claimant or personal service of the claim or any other document by which the litigation proceedings were commenced;

-the foreign court that granted the judgment did not comply with the bilateral agreement granting jurisdiction to the Slovenian courts;

-the case involved issues that were barred by res judicata, because the matter had previously been ruled upon by another court, and the issues were prohibited from being adjudicated again in a different court, based on issues that were previously judged;

-the effect of recognition and enforcement would be contrary to the public order of the Republic of Slovenia; or,

-if no reciprocity is established between the Republic of Slovenia and the foreign court which issued the award.

The recognition and enforcement of foreign arbitral awards are carried out in accordance with the Slovenian Private International Law and Procedure Act. Furthermore, most international arbitral awards are decided in accordance with the applicable provisions of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Arbitral awards that are enforced under the provisions of the Private International Law and the Procedure Act must fulfil certain criteria. Generally, this requires that the party seeking enforcement submit to the competent court:

-the original arbitral award or certified copy thereof;

-the original arbitration agreement or certified copy thereof; and

-a certified translation of the arbitral award into Slovenian, or another official language recognized by the Slovenian Courts.

The request for the recognition and enforcement of the foreign arbitral award should be filed at the District Court. In the event that the court establishes that no obstacles exist for the recognition and enforcement of the foreign arbitral award, the court may issue an order for enforcement of the foreign award. Any appeals to an order recognizing a foreign arbitral award must be filed within a period of 15 (fifteen) days after the order recognizing the award is issued.

Slovenia is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitration, with the reservation that the Convention will only be applied to those arbitral awards which were adopted after the entry into effect of the Convention. Slovenia is also a party to the 1961 European Convention on International Commercial Arbitration, as well as to the 1965 Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States.

2. LITIGATION

3. BUSINESS CRIME

4. INSOLVENCY

5. ARBITRATION

6. ENFORCEMENT OF FOREIGN JUDGMENTS AND ARBITRAL AWARDS

7. PRACTICE TIPS

TYPE OF PROCEEDINGS

PRACTICE TIPS

PROCEDURE AND ASSUMPTIONS

Pro Bono System

There are no class actions in Slovenia.

There are no civil jury trials in Slovenia.

Simple cases: First instance: 11 months; second instance: 8 months; extraordinary remedies: 7 months.

Complex cases:  First instance: 2 or more years; second instance: 12 months; extraordinary remedies: 1 year or more.

jury trials

Approximate Duration

-The above-mentioned mediation proceedings are usually for free (paid for out of the state's budget).

-Commercial disputes are no longer free. An average commercial mediation costs approx. EUR 94 per party (excluding attorneys' fees).

-Litigation costs include court fees, attorneys' fees and expenses for expert opinions and witnesses.

-Court fees have to be paid upon filing the claim.

-Court fees in the first and second instances

are to be paid by the party filing the appeal.

-If a claim is filed by a foreign party and enforcement of a decision on reimbursement of litigation costs is not safeguarded, the foreign party can be ordered to pay a security deposit (subject to international conventions and EU Law). Security deposits cannot be ordered for EU citizens.

-Litigation costs are generally awarded against the losing party who must reimburse the winning party.

-If a claimant has been partially successful, the costs of both sides are divided on a pro-rata basis. However, reimbursement of attorney fees only has to be made on the basis of the fees provided for in the Act on Attorneys' Tariffs.

-The actual attorney fees of a party (depending on the fee agreement between attorney and client) may be substantially higher, but are of no relevance to the opposing party.

In a Slovenian civil procedure, at the beginning of a dispute the court will offer mediation as an alternative dispute resolution method. The parties may give or refuse to give their consensus to participate in such proceeding.

class actions

Court fees are based on the Court Fees Act and depend on the amount in dispute. Examples:

-Amount in dispute EUR 500,000: Court fees: EUR 6,525 in first instance;

-Amount in dispute EUR 1,000,000: Court fees: EUR 9.525 in first instance;

-Amount in dispute EUR 5,000,000: Court fees: EUR 36,225 in first instance.

Assumptions based on an amount in dispute of EUR 500,000: First instance: Preparation of briefs, attendance on hearings, correspondence with client, in total: EUR 4,937.50; second instance: preparation of briefs, attendance at hearings, correspondence with client, in total: EUR 5,530; extraordinary remedies: preparation of briefs, attendance at hearings, correspondence with client, in total: EUR 6,320

Assumptions based on an amount in dispute of EUR 5,000,000: First instance: preparation of briefs, attendance at hearings, correspondence with client, in total: EUR 27,435.50; second instance: Preparation of briefs, attendance on hearings, correspondence with client, in total: EUR 30,730; extraordinary remedies: Preparation of briefs, attendance at hearings, correspondence with client, in total: EUR 35,120.

Mandatory Representation

by Counsel

Document production occurs within the standard civil procedure.

-Mandatory presentation by Counsel is required only in proceedings concerning extraordinary remedies (izredna pravna sredstva).

-Should a party decide to be represented, it may empower:

-anyone with full contractual capacity (poslovna sposobnost) in front of a Municipal Court; and

-a Counsel (Attorney-at-Law) or a person with the bar exam in front of a District, High or Supreme Court.

Approximate Costs

COURT FEES

ATTORNEYS’

FEES (NET)

Simple Case

Complex Case

Yes. There is legal aid for people who cannot afford the costs of legal proceedings.

STANDARD CIVIL PROCEEDINGS

Document Production

Generally no.

-There is no formal investigation in Slovenia.

-Documents are subject to disclosure if the 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 document is qualified as a "joint deed" between the parties.

-A court order to produce such documents is not enforceable. Failure to comply with the order can only be considered by the court in its evaluation of the case.

APPROXIMATE COSTS

Court Fees

ATTORNEYS’

FEES (NET)

Simple Case

Complex Case

Depending on the mental and physical state of the accused and the maximum statutory penalty imposed for a crime, representation by counsel becomes mandatory either from the very first hearing or later on during the proceedings.

jury trials

-Slovenian criminal trials are mixed; combining both inquisitorial and inquisitorial elements of criminal trial. Which means that while both parties can make suggestions as to what evidence to use (e.g., whom to call as witness), the judge

is free to accept or deny suggestions by both parties. He/she can also gather evidence

proprio motu.

-When deciding, the judge is not bound by any ev- identiary rules and can decide at his/her own dis- cretion how much weight to attach to individual pieces of evidence.

First instance fees which apply in case of final convictions to prison sentences: EUR 70 to EUR 1,400; unsuccessful appellate proceedings:

EUR 35 – EUR 2,800.

Attorneys' Fees for the representation of an individual in a criminal case with the maximum statutory penalty of 3 years (studying file, presence at investigate steps), representation in pre- indictment proceedings, defence in first instance, representation at main trial in first instance (one day in court), representation in second instance (no days in court): EUR 575 to EUR 695 (every additional day in court costs from EUR 120 to EUR 240).

Attorneys' Fees for representation of an individual in a criminal case with the maximum statutory penalty of 15 years: EUR 600 to EUR 740 (every additional day in court costs from EUR 140 to EUR 280).

Document Production

There are no criminal jury trials in Slovenia.

Pro Bono System

-Litigation costs include the costs of an attorney and court fees. Both are borne by the state

(as far as acknowledged by the judge and up

to the statutory amounts) if a not-guilty verdict

is rendered.

-In case of a conviction, the accused has to pay the court fee upon the finality of the verdict.

-It is not uncommon for the attorney and the client to agree on different remuneration, however, this has no bearing on what is being reimbursed.

Approximate Duration

First instance: Most criminal proceedings take 1 year or between 1 and 2 years; Second instance: Approx. 3 months.

Business Crime

class actions

Representation by a Counsel is not mandatory, except in the following cases:

-from the first hearing if the suspect/accused is deaf, mute, or otherwise incapable of defending him or herself;

-from the first hearing if the maximum statutory penalty is 30 years or life imprisonment;

-from the first hearing if prolonged arrest could be imposed;

-if, at the first hearing before the investigating judge, the public prosecutor announces that he/she will prosecute the suspect and ask for arrest or another measure the purpose of which is to ensure the suspect's/accused's presence during trial, prevent repetition of the crime and to ensure successful conduct of the proceedings, until the judge has decided upon the request for such a measure;

-during the entire time that measures for the deprivation of liberty are implied;

-when being served the indictment for a crime the statutory maximum penalty for which is 8 years or more;

-while engaging in plea bargaining.

Both parties can present and suggest evidence. The court might produce evidence proprio motu.

Mandatory Representation

by Counsel

Yes. There is legal aid for people who cannot afford the costs of legal proceedings.

-After the investigation has produced enough evidence for an indictment, an indictment hearing will take place.

-There is the possibility of conducting a plea bargaining agreement.

-After the indictment hearing, a trial date is set. It is encouraged for trials to not take more than one day; however, in complicated cases trials can last for months (usually because of various forms of more or less successful delaying techniques).

-The trials are public and their course is dictated by an inquisitorial judge who is required to find the material truth, although the criminal procedure, especially the main hearing consist of many elements of criminal adversarial procedure.

There are no class actions in Slovenia.

Generally, a decision on a request for a preliminary injunction is rendered within 1 week.

Court fees for a preliminary injunction amount to EUR 16, regardless of the disputed amount.

Assumptions based on an amount in dispute of EUR 1,000,000: Only the request for a preliminary injunction is filed, the court renders its decision without hearing the opponent: first instance: EUR 892.50; second instance: EUR 1,785.

Assumptions based on an amount in dispute of EUR 1,000,000: Only the request for a preliminary injunction is filed, with a hearing: first instance: EUR 1,785; second instance: EUR 3,570.

Approximate Duration

Preliminary Injunction Proceedings

APPROXIMATE COSTS

COURT FEES

ATTORNEYS’

FEES (NET)

Simple Case

Complex Case

Very limited. Document production is only allowed according to the applicable arbitration rules.

-The costs of arbitration depend on the arbitration agreement and the amount in dispute, the amount of documents, number of witnesses and whether expert opinions are required.

-The costs of arbitration also include the fees of arbitrators and administrative charges.

-In the case there is an arbitral tribunal with three arbitrators, the fees double.

-The arbitrators usually have large discretion regarding the award of costs. However, in practice the award on costs often depends on the outcome of the case.

-The award of legal fees is usually not determined by reference to a statutory tariff.

Arbitration Proceedings

Document Production

Approximate Duration

The usual duration of arbitration proceedings is up to 2 or even 3 years. According to information received from the Ljubljana Arbitration Centre, the proceedings became shorter in the last few years and it is not uncommon for proceedings to be completed within 9-12 months

APPROXIMATE COSTS

Procedural Costs

Simple Case

Complex Case

ATTORNEYS’

FEES (NET)

Simple Case

Complex Case

The Permanent Court of Arbitration Attached to the Chamber of Commerce and Industry of Slovenia is the only general and permanent arbitral institution in Slovenia with a noticeable caseload of commercial matters.

The procedural costs depend on whether a sole arbitrator or an arbitral tribunal of three members is appointed, the complexity of the case, and the administrative charges.

The following estimates are based on the procedural costs of the Rules of Arbitration of the Permanent Court of Arbitration Attached to the Chamber of Commerce and Industry of Slovenia:

Assumption: international dispute, sole arbitrator appointed and an amount in dispute of EUR 1,000,000: Procedural costs: registration fee of EUR 1,000; administrative fees of EUR 9,500 and fees for a sole arbitrator between EUR 20,400 and EUR 30,600.

Assumption: international dispute, sole arbitrator appointed and an amount in dispute of EUR 10,000,000: Procedural costs: registration fee of EUR 1,000; administrative fees of EUR 18,000 and fees for a sole arbitrator of between EUR 63,600 and EUR 95,400.

Assumptions based on an amount in dispute of EUR 1,000,000: preparation of 2 filings, attendance at 1 hearing, correspondence with client: around EUR 4,200.

Assumptions based on an amount in dispute of EUR 10,000,000: preparation of 4 filings, attendance at 3 hearings, correspondence with client, in total: EUR 8,000

The fee for recognition decisions is EUR 16 – EUR 35, regardless of the disputed amount.

The fee for enforcement proceedings is EUR 44 and above, depending on the manner of filing and number of additional means of enforcement.

Simple case (assumption based on an award of EUR 1,000,000): Approx. EUR 780.

Complex case (assumption based on an award of EUR 5,000,000): Approx. EUR 780.

APPROXIMATE COSTS

COURT FEES

ATTORNEYS’

FEES (NET)

Enforcement of Foreign Judgments and Arbitral Awards

-Under EC Regulation 44/2001, the party seeking recognition/enforcement must submit a copy of the judgment which should be accompanied by a Certificate of Authenticity issued either by the court that rendered the judgment or by another competent institution of the state of origin.

-To avoid any delays, attaching a certified translation of the judgment is highly recommended.

-Judgments that fall outside the scope of application of the EC Regulation must be submitted in the original or in a copy issued by the court that rendered the judgment. A certified translation of the judgment must be submitted.

-For enforcement of awards under the New York Convention, the creditor must provide the court with the authenticated original award or a duly certified copy thereof and the original of the arbitration agreement or a duly certified copy thereof.

Approximate Duration

Depends mainly on the type and basis of the proceeding. Under EC Regulation 44/2001, proceedings are shorter than under usual proceedings under the Private International Law and Procedure Act or under the Arbitration Act (New York Convention).

It takes approximately 1 to 3 months until a decision on recognition and enforcement is rendered in first instance.

The duration of execution proceedings depends mainly on whether the debtor has executable assets and whether execution measures are opposed by the debtor.

APPROXIMATE COSTS

COURT FEES

ATTORNEYS’

FEES (NET)

Compulsory settlement proceedings

Bankrubtcy proceedings

Assumptions:

Claim filed by a creditor in the amount of EUR 500,000: court fees amount to EUR 2,000.

Claimed amount is EUR 500,000, representation of creditor in preliminary proceeding and main proceeding:  Approx. EUR 2,970.

Claimed amount is EUR 500,000, representation of debtor in preliminary proceeding and main proceeding: Approx. EUR 7,900.

Claimed amount is EUR 500,000, representation of creditor in preliminary proceeding and main proceeding: Approx. EUR 2,970.

Claimed amount is EUR 500,000, representation of debtor in preliminary proceeding and main proceeding: Approx. EUR 3,950.

Approximate Duration

Creditors should generally file their claims within three months after the insolvency proceeding begins.

1 year to several years; in very complex cases, duration of more than 10 years is possible.

Insolvency Proceedings

-The commencement of insolvency proceedings is published on the webpage http://www.ajpes.si/eObjave/

-On the webpage, all the relevant periods (e.g. for filing of claims, for appeals) are set.

Filing of Insolvency Claims by Creditors

CONTACT

OFFICE

Bleiweisova cesta 30

SI - 1000 Ljubljana

+386 1 438 00 00

ljubljana@wolftheiss.com

www.wolftheiss.com/offices/slovenia

Žiga Dolhar

Associate

Wolf Theiss Slovenia

+386 1 438 0000

ziga.dolhar@wolftheiss.com