Consequences of Arbitration: It is Possible to Challenge Arbitration Decisions in Court, but the Reverse Case Does Not Exist

In Croatia, it often happens that untruths (less frequently) or, more dangerously, half-truths are released into the public domain, which are then extensively analyzed by both official and unofficial sources. Two such cases prompted us to react. The first is the writing and largely completely erroneous commentary on the arbitration decision of the International Centre for Settlement of Investment Disputes (ICSID) based in Washington regarding the case of Mol against the Republic of Croatia, in which Croatia is obliged to make a certain (million) payment. In this context, all media not only reported but also emphasized that this arbitration did not accept something that was previously definitively adjudicated in a criminal proceeding in Croatia, namely the verdict against former Prime Minister Ivo Sanader and the CEO of MOL, Zsolt Hernádi. A practically created (or at least presented as plausible) image of automatism emerged – when it is so in arbitration, it should automatically apply to other decisions related to that case.

Adjudicated Matters are Adjudicated

Firstly, it is necessary to clearly distinguish whether a case involves two identical proceedings or not. For example, criminal and civil proceedings, judicial and arbitration proceedings are not identical. It is not sufficient to conclude similarity merely because the parties are the same, nor even that both cases involve a monetary claim, because the same parties can, even from the same event, have different claims (for example, one is a property claim for lost profits, something completely different is compensation for damage due to violation of personal rights). Generally, once a proceeding is completed and a decision exists, a new proceeding on the same matter is out of the question, unless it is a matter of legal remedies. This includes, for example, the reopening of proceedings due to the emergence of certain circumstances, and it is quite likely that this possibility will be attempted to be utilized, although it cannot be an automatism. This is a logical consequence of the existence of the rule of res iudicata, or adjudicated matters, because otherwise, the same proceedings would be endlessly conducted.

Secondly, although arbitration decisions are binding, they can still be challenged in court (albeit under very restrictive conditions), and the reverse case does not exist. Thirdly, although it is a technical detail, it is known that even guilt is not the same (not only in Croatian but also in world law) in civil and criminal proceedings. Fourthly, the arbitration decision for Croatia is not negative, but only partially negative (and that part is less than 30%), and for the rest, it is evident that success was achieved and that arbitration paid off (the alternative was obviously to pay much more).

(Dis)agreement with the Chief

The second case relates to the Supreme Court and statements from its president that have been circulating in the media for days. Without delving into who the current president of the highest court in the Republic of Croatia is, this is a person who, by definition, must have the highest possible authority, and whose (at least factual statements made without reservation) statements everyone should believe without special verification. A few days ago, a round table was organized at the highest court on the topic, among other things, of additional income for judges, and the president stated (all media reported) that some judges, not many (and some have recently retired), earn even their annual salary as judges in a year.

The president is clearly opposed to such earnings and does not hide it, and we do not see this as a problem; it is his stance to which he is entitled. However, he has no right to mix something like an occurrence with an ad personam reaction (why is it important that someone has retired), nor does he have the right the day after to dismiss two prominent judges, one from the position of head of the judicial practice department, with the justification that members of his inner team must be loyal to him. Does anyone reasonable think that the proper management of judicial practice, which includes European legal acquis and is a very demanding job, involves sharing opinions with the court president about anything, including additional legal income?

Earnings from Arbitrations

Namely, no arbitrator, including those who are professional judges, is not limited to one arbitration per year, and those most competent are (logically) the most sought after, chosen by the other two proposed by the parties in that arbitration. It is known what the annual salary of a Supreme Court judge is, as well as the tariff of the Croatian Chamber of Commerce, according to which, for example, each arbitrator in one of the probably most well-known arbitrations in recent times (by coincidence, this data has come to public attention due to many various complaints, finally also a verdict by which that arbitration decision was definitively overturned) was paid double the net annual salary in a one-time payment. At the same time, no one questions whether every judge who has any additional income meets the norm or not. No one questions how the engagement of an enormous number of judges in elections affects the work of the Croatian judiciary or whether the best have been selected for the highest judicial positions, not only for the highest…?