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Failed to Declare Arbitration Decision as Enforcement Title

Almost every authority has a habit of justifying new regulations by claiming that they will relieve the judiciary, expedite proceedings, and that better solutions for parties will not mean more expensive services… and all in that style.

Sometimes a new solution is indeed better, for example, in the case of transferring jurisdiction in expropriation proceedings from the truly overloaded Administrative Court to all county courts. In some other cases, the new solution is better, but still far from what it could and should be, such as the transfer of jurisdiction in inheritance proceedings to notaries. The service has become significantly more expensive, although the proposal’s justification claimed otherwise, and entrusting these tasks to courts that do not have enough files did not rationalize operations, nor was the issue of the order in which files are assigned to larger courts resolved, so parties sometimes have to travel tens of kilometers instead of going to the city center. Sometimes, however, the legal solution (for example, in the case of public enforcers) was put out of force even though the enforcers had already been appointed and were ready to start working at any moment, despite the fact that it was known even then that this repeal would cost the state a lot.

Delivery Problem The constant effort of the Croatian legislator to relieve the judiciary is also evident in the promotion of mediation and arbitration. The most well-known arbitration is that of the Croatian Chamber of Commerce, which entrepreneurs often contract. The main advantage of the arbitration procedure is that it is conducted in one instance, while in courts it is usually in two instances before the finality and enforceability of the decision, with the Supreme Court deciding on the appeal as soon as the value of the subject matter of the dispute is 200,000 kuna in ordinary disputes or 500,000 kuna in commercial ones, not to mention the possibility of the Constitutional Court’s jurisdiction. Besides being inherently faster, arbitration does not involve distrust towards arbitrators since each party appoints one and they jointly appoint a third.
During the great economic crisis, all creditors welcomed yet another new law on the enforcement of claims on monetary assets that enabled so-called direct collection through Fina, meaning they no longer have to turn to the enforcement court. Until now, objections to this solution mainly came from debtors whose accounts were too often mistakenly blocked or were unblocked too slowly. All of this is generally related to a truly significant Croatian problem – the delivery of documents.

When Transcribing… However, it has just been shown that once again what can best be described by the saying of the legend of Croatian sports journalism, unfortunately, the late Mladen Delić: ‘My people, is this possible?!’ Namely, although it is beyond doubt that the arbitration decision is an enforcement title (the legal term for the designation of a document based on which enforcement can be sought and obtained), and although the Enforcement Act in Article 36 stipulates that the one who made the arbitration decision does not place a confirmation of enforceability on it, which is mandatory in the case of court decisions submitted for enforcement to other courts, the same Enforcement Act failed in Article 209 when enumerating the documents based on which so-called direct enforcement can be requested from Fina to mention the arbitration decision. Article 209 of the Enforcement Act is actually a transcription of the provision of Article 3, paragraph 1, item 1 of the Law on the Enforcement of Claims on Monetary Assets, which does not contain anything about arbitration decisions, and therefore Fina refuses to directly (without a decision from the enforcement court) enforce based on a decision made in arbitration proceedings.

It Can Be Corrected Of course, it would be possible to apply so-called purposive or teleological interpretation through the process of interpretation and overcome the imprecision of the legislator. However, it must also be understood that those from Fina fear that someone will sooner or later accuse them of favoring someone (the creditor) and harming someone (the debtor), which in the worst-case scenario does not exclude criminal liability. We do not necessarily mean a final judgment, but it is bad enough to initiate any proceedings.
However, it is incomprehensible why the authorities do not react, but tolerate such a poor and legally uncertain situation in which someone who opted for arbitration because it is faster and simpler cannot obtain enforcement as quickly as guaranteed to everyone who chooses court proceedings.