ARBITRATION ACT

("Off. Herald of RS", No. 46/2006)

 

Chapter I

BASIC PROVISIONS

Subject

Article 1

This Act regulates arbitral resolution of disputes (hereinafter: arbitration) without a foreign element (hereinafter: internal arbitration) and disputes with a foreign element (hereinafter: international arbitration).

Scope of Application

Article 2

The provisions of this Act are applied to arbitration and arbitral proceedings when the place of arbitration is in the territory of the Republic of Serbia (hereinafter: the Republic).

The parties may envisage otherwise in case of the international arbitration.

The provisions of this Act whose application the parties may not exclude, shall be adhered to when the place of arbitration is in the Republic.

International Arbitration

Article 3

International arbitration, in terms of this Act, is such an arbitration which has for its subject matter the disputes arising from international business relations, notably if:

1) The parties at the time of concluding the arbitration agreement have their principal place of business in different states;

2) One of the following places is situated outside the state in which the parties have their principal place of business:

a) Place of arbitration, if so set out in the arbitration agreement or pursuant to it, or

b) Place where a significant part of commitments from a business relationship is to be carried out or a place with which the subject matter of the dispute is most closely tied with;

3) The parties have expressly agreed that the subject matter of the arbitration agreement is linked with several states.

If one of the parties does not have a principal place of business, habitual residence is taken into account for the party concerned.

Grounds for Arbitration

Article 4

A dispute may be resolved through arbitration only on the basis of the agreement of the parties.

A dispute for which arbitration is agreed upon is resolved by an arbitration court, consisting of the arbitrators.

Capability of a Dispute for Arbitration (Arbitrability)

Article 5

Arbitration may be agreed for resolving of a pecuniary dispute regarding the rights exercised freely by the parties, save the disputes for which an exclusive competence of the court is set.

Any natural or legal person may agree to arbitration, including the state, its authorities, institutions, and enterprises, in which it has its ownership share.

Arbitration may be agreed to by anyone who, pursuant to the provisions of the act regulating the civil procedure, is eligible to be a party in a procedure.

Organizing Arbitration

Article 6

Arbitral resolution of a dispute is organized by a permanent arbitral institution, pursuant to its rules and this Act, when this is envisaged by the agreement between the parties.

Permanent arbitral institutions may be established by commercial chambers, professional and trade associations, citizens’ associations pursuant to their founding act and this Act, if this is in line with their activity.

The parties may agree to an ad hoc arbitration, which is organized pursuant to the agreement between the parties and this Act.

Role of the Court

Article 7

State court (hereinafter: the Court) may, as regards to an arbitration, undertake only those activities expressly determined by this Act.

Application of International Treaties

Article 8

The application of this Act is without prejudice to the application of a ratified international agreement.

Chapter II

ARBITRATION AGREEMENT

Notion

Article 9

By arbitration agreement, the parties entrust an arbitration court to resolve their future disputes or disputes arising from a certain legal relationship.

Arbitration agreement for resolution of future disputes may be contained in a contractual provision (hereinafter: arbitration clause) or in a separate contract.

Nullity

Article 10

Arbitration agreement is null if:

1) Types of disputes that it pertains to are not suitable for arbitration;

2) It is not concluded in a form set out by this Act;

3) The parties did not have needed capacity or eligibility to conclude it, or

4) It is concluded as a result of coercion, threat, fraud, or misapprehension.

Arbitration agreement does not produce effects as regards resolution of a dispute which is not eligible for arbitration.

Subsequent Agreement

Article 11

Arbitration agreement may be concluded even if a dispute, which has arisen, has been brought to court for resolution.

Form

Article 12

Arbitration agreement shall be concluded in writing.

Arbitration agreement is concluded in writing if contained in the documents which the parties have signed.

Arbitration agreement is considered to be concluded in writing if it is concluded by exchanging messages via communication means which provide a written proof of an agreement between the parties, regardless of the fact whether such messages have been signed by the parties or not.

Arbitration agreement is also considered to be concluded if the parties in a written contract refer to another document containing the arbitration agreement (general terms for concluding of a legal transaction, text of another contract, etc.) if the purpose of such reference is to make the arbitration agreement an integral part of the contract.

Arbitration agreement is also considered to be in place if the plaintiff initiates arbitral proceedings in writing, while the defendant expressly accepts the arbitration and consents to it in writing or in a statement recorded in a hearing, as well as if the latter takes part in the arbitral procedure and fails to file an objection as to the existence of the arbitration agreement, i.e. fails to challenge the jurisdiction of the arbitration court before engaging into discussion on the subject matter of the dispute.

Transfer

Article 13

Arbitration agreement remains in force even in case of an assignment (cession) of a contract or claim, unless otherwise agreed.

Arbitration agreement remains in force in case of a subrogation, unless otherwise agreed.

Provisions of paras. 1 and 2 of this Article are applicable even in other cases pertaining to transfer of claim, unless otherwise agreed.

Court Action

Article 14

The court before which an action is brought in a matter which is the subject matter of an arbitration agreement dismisses the action declaring the lack of jurisdiction, upon objection by a party that shall be filed prior to engagement in the discussion of the subject matter of the dispute, unless it determines that the arbitration agreement is evidently null and void, without effect, or that it is incapable of being performed.

Interim Measures

Article 15

Before initiating an arbitral proceeding or in the course of such proceeding, every party may submit a request to the court to impose interim measures and the court may impose such measures.

The provision of paragraph 1 of this Article is applied even when the arbitration agreement relates to an arbitration taking place in another state.

Chapter III

ARBITRATION COURT

Composition

Article 16

The number of arbitrators in the arbitration court is determined by the parties.

The arbitration court is made of one arbitrator (sole arbitrator) or three, i.e. several arbitrators (arbitral panel). If the arbitration agreement envisages several arbitrators, their number shall be an odd number.

Should the parties not determine the number of arbitrators, the number thereof is determined by a person or institution that the parties designated by agreement (hereinafter: appointing authority), and if there is no appointing authority or it fails to do so, the number of arbitrators is determined by the competent court.

If the arbitration is organized by a permanent arbitral institution, the latter shall carry out the duties of the appointing authority.

Appointment of the Arbitrators

Article 17

Parties may agree on the appointment procedure for the arbitrators, and if this is not envisaged by the agreement, the arbitrators are appointed pursuant to this Act.

If the dispute is to be resolved by a sole arbitrator, the latter is appointed by agreement of the parties within the period of 30 days from the day when one party has invited another party to jointly appoint the arbitrator. In the absence of such agreement, the appointment is carried out by the appointing authority and in the absence of such authority or if such authority fails to do so, the appointment is carried out by the competent court.

If the dispute is to be resolved by three arbitrators, each party appoints one arbitrator within a period of 30 days from the day when another party has invited it to do so. If the invited party fails to appoint the arbitrator, the arbitrator is appointed by the appointing authority designated by the parties, and in the absence of such authority or if such authority fails to do so, the appointment is carried out by the competent court. The third arbitrator who is presiding over the arbitration court (hereinafter: the President or the President of the Arbitration Court) is elected by the appointed arbitrators within the period of 30 days from the day of their own appointment. Should they fail to elect him, the appointment is done by the appointing authority and in the absence of such authority or if such authority fails to do so, the appointment is done by the competent court.

Against the court decision on appointing an arbitrator there may be no appeal.

Arbitration Costs

Article 18

The parties bear the costs of arbitration.

The amount of the costs from paragraph 1 of this Article is determined by the arbitration court.

The parties shall pay in advance the costs from paragraph 1 of this Article upon request of the arbitration court.

Permanent arbitral institution independently determines the costs of arbitration and the scale of such costs.

Chapter IV

ARBITRATORS

Eligibility for Arbitrator

Article 19

An arbitrator may be any natural person having contractual capacity, regardless of his citizenship.

An arbitrator shall have the qualities determined in the agreement of the parties.

An arbitrator shall be impartial and independent with regard to the parties and the subject matter of the dispute.

An arbitrator may not be a person sentenced to an unconditional prison sentence, while the consequences of the sentence are having effect.

Accepting the Duty of an Arbitrator

Article 20

The arbitrator issues a written statement on accepting the duty of an arbitrator.

Arbitrator’s Duty to Inform the Parties about Essential Facts

Article 21

A person proposed for an arbitrator shall disclose, before accepting the duties of an arbitrator, the facts that may justifiably raise suspicion about his impartiality or independence.

An arbitrator shall disclose without undue delay, as of the day of his appointment, the facts from paragraph 1 of this Article, if they have taken place after his appointment.

Performance of Duty

Article 22

An arbitrator shall carry the duty of an arbitrator conscientiously and efficiently.

Reasons for Challenging an Arbitrator

Article 23

A motion to challenge an arbitrator may be filed only if there are facts that may justifiably raise suspicion about his impartiality or independence or his qualities as set by agreement of the parties.

Challenge Procedure

Article 24

Unless the parties have agreed otherwise, the request to challenge the arbitrator is submitted in writing by a party within a period of 15 days from the day such party found out about the appointment of the arbitrator or for the reasons for challenging.

The party which has appointed the arbitrator individually or with the opposing party may challenge the arbitrator only if the reason for challenging has arisen or the party has found out about it after such arbitrator was appointed.

Unless the parties agreed otherwise, the competent court decides about the challenge of an arbitrator.

It is considered that the parties who entrusted the organization of arbitration to a permanent arbitral institution have agreed that the request to challenge the arbitrator is resolved pursuant to its rules.

An arbitration court may continue the arbitral proceedings and pass an arbitral decision even though the challenge procedure is underway.

Termination of Arbitrator’s Duty

Article 25

An arbitrator may resign from duty by a written statement if, for justifiable reasons, including the reasons from Article 23 of this Act, he is not able to perform his duty any more.

The parties may agree to terminate the arbitrator’s mandate if he, based on factual or legal reasons, including the reasons from Article 23 of this Act, is no longer able to perform his duty or fails to perform his duty within an appropriate time period.

Should the arbitrator resign from duty or a party consents to the termination of an arbitrator’s mandate, this does not imply the acceptance of validity of grounds for termination of arbitrator’s mandate.

Should the parties not agree on the termination of an arbitrator’s mandate, the party maintaining that the arbitrator is no longer able to perform his duty or that he is failing to perform his duty within the appropriate time period, may request from the permanent arbitral institution or, in case of an ad hoc arbitration, from the competent court, to pass the decision on the termination arbitrator’s duty.

Against the court decision on the termination of duty of an arbitrator there may be no appeal.

Appointment of a New Arbitrator

Article 26

Should the arbitrator’s duty be terminated, a new arbitrator is appointed pursuant to the provisions of this Act pertaining to the appointment of arbitrator.

Chapter V

JURISDICTION OF THE ARBITRATION COURT

Grounds for Jurisdiction

Article 27

The jurisdiction of the arbitration court is determined by the agreement of the parties.

Ruling of the Arbitration Court on its Jurisdiction

Article 28

Arbitration court may rule on its jurisdiction, as well as on the objection regarding the existence or validity of the arbitration agreement.

If the arbitration agreement is concluded in the form of the arbitration clause, such clause is, in the process of ruling on the objection regarding the existence or validity of the arbitration agreement, considered as independent from other contractual provisions.

Decision of an arbitral body to declare a contract containing an arbitration clause null and void does not entail the nullity of such clause.

Objections on Lack of Jurisdiction or Exceeding the Scope of Authority

Article 29

An objection that the arbitration court lacks jurisdiction (hereinafter: jurisdictional objection) shall be filed by the defendant not later than the submission of his statement of defense.

The defendant is entitled to file the jurisdictional objection of incompetence even when he has already appointed the arbitrator or has participated in his appointment.

An objection that the arbitration court is exceeding the scope of its authority (hereinafter: objection of exceeding the authority) shall be submitted by the party as soon as the issue for which is claimed to exceed the scope of authority of the arbitration court is presented in the arbitral procedure.

Arbitration court may allow that the objections from para. 1 through 3 of this Article may also be submitted later, if it assesses that the delay is caused by justified reasons.

Ruling on Objections

Article 30

The arbitration court may rule on the objections submitted pursuant to Art. 28 and 29 of this Act as a preliminary question or by award on the matter in dispute.

Should the arbitration court rule on the objections as if they were a preliminary question, each party may, within the period of 30 days from the day when such decision has been served, request from the court determined by law to rule on that issue.

Against the court decision from paragraph 2 of this Article there may be no appeal.

Arbitration court may continue with the proceedings and pass an arbitral award while the proceedings before the court about the objections from paragraph 2 of this Article are pending.

Authority of the Arbitration Court to Impose Interim Measures

Article 31

Unless the parties have agreed otherwise, the arbitration court may, at a proposal by one of the parties, impose an interim measure which it deems necessary with regard to the matter in dispute, and may simultaneously decide that the opposing side deposit an appropriate security.

Chapter VI

PROCEEDINGS BEFORE THE ARBITRATION COURT

Determining the Rules of Procedure

Article 32

The parties are free to determine by agreement the rules of procedure to be followed by the arbitration court or to point out to certain arbitral rules, pursuant to the provisions of this Act.

If the arbitration is an international, the parties may agree to apply foreign law to the arbitration procedure, pursuant to the provisions of this Act.

Should the parties fail to determine by agreement the rules of arbitral procedure, the arbitration court may conduct arbitral procedure in a way that it deems appropriate, pursuant to the provisions of this Act.

The authority of the arbitration court under paragraph 3 of this Article comprises the right to rule on admissibility, significance, and proving power of the proposed and considered evidence.

Fundamental Procedural Principles

Article 33

The parties are equal in the proceedings before the arbitration court.

Arbitration court shall enable each party to present its views and evidence, as well as to take a stand on the activities and proposals of the opposing party.

Place of Arbitration

Article 34

The parties may determine the place of arbitration by agreement.

If the parties fail to determine the place of arbitration by agreement, the place of arbitration is set by the arbitration court, taking into account the circumstances of the case which also include the convenience of the parties.

If the parties have agreed to entrust the organization of the arbitration to a permanent arbitral institution, the place of arbitration is determined pursuant to its rules.

If the place of arbitration is not determined pursuant to paras. 1 through 3 of this Article, it is deemed that the place of arbitration is the place indicated in the arbitral award as the place of its issuance.

Notwithstanding the provisions of the paras. 1 through 4 of this Article, unless the parties have agreed otherwise, the arbitration court may convene in any place it deems appropriate, for the purpose of deliberation of arbitrators or for hearing of witnesses, expert witnesses, or parties, as well as for the purposes of inspection of goods, other items or documents.

Language

Article 35

The parties may determine by agreement the language or languages in which the arbitral proceedings shall be conducted, and if there is no such agreement, this shall be decided upon by the arbitration court, taking into account the place of arbitration and the language that the parties used in their legal relationship.

Permanent arbitral institutions may regulate by their rules the issue of language in the arbitral proceeding.

The language of arbitration is applied to all written statements of the parties, to hearings, to arbitral decisions and other acts of the arbitration court, unless the parties agree otherwise, or if, in the absence of such agreement, the arbitration court decides otherwise.

Arbitration court may determine that, along with the written evidence, a translation thereof is submitted in the language or languages that the parties have determined by agreement or that the arbitration court has determined.

Until the language of the proceedings is determined, the statement of claim, the statement of defense, and other submissions may be submitted in the language of the contract or in the language of the arbitration agreement or in Serbian language.

Statement of Claim and Statement of Defense

Article 36

Unless the parties have agreed otherwise, the plaintiff discloses in the statement of claim the facts on which he bases his demands, the issues in dispute, and determines the sought claim.

Had the plaintiff submitted the request for arbitration before filing the statement of claim, the statement of claim is filed within the time period determined by agreement of the parties, and should they fail to determine such time period, then in the period determined by the arbitration court.

Unless the parties have agreed otherwise, within the time period that the parties have determined by agreement or that arbitration court has determined, the defendant shall provide his statement of defense and make a plea as to the demands, statements, and evidence contained in the statement of claim.

In the course of the proceedings, the parties may amend or supplement the statement of claim, i.e. the statement of defense, unless they have agreed otherwise, or unless the arbitration court decides otherwise for the purpose of efficiency of the procedure.

Counterclaim

Article 37

The defendant may file a counterclaim, unless the parties have agreed otherwise.

The counterclaim is subject to provisions of this Act which regulate the statement of claim.

Commencement of the Arbitral Proceedings

Article 38

Unless the parties have agreed otherwise, the arbitral proceedings start:

1) If the arbitration is organized by a permanent arbitral institution, on the day when such institution receives a request for arbitration or the statement of claim,

2) in ad hoc arbitration, on such day when the defendant receives the request for arbitration or the statement of claim and a notification that the plaintiff has appointed an arbitrator, or proposed a sole arbitrator and invited the opposing party to appoint its arbitrator or to approve the proposed sole arbitrator.

Hearings and Written Proceedings

Article 39

Unless the parties have agreed otherwise, the arbitration court decides whether it shall hold a hearing or if it shall conduct proceedings based on documents and other written materials.

Should one of the parties request that a hearing is held, the arbitration court shall hold a hearing unless the parties have agreed to exclude a hearing.

Duty to Notify

Article 40

The parties shall be timely informed about each hearing, as well as about any meeting of the arbitration court which is held in order to inspect the goods, other items or documents.

All submissions, documents, and information submitted by one party to the arbitration court are delivered to the other party.

Each report of an expert witness or a document which represents evidence is delivered to the parties.

Manner of Delivery and Receiving of Written Documents

Article 41

Unless the parties have agreed otherwise, it is deemed that a written document has been received on the day when it was delivered personally to the addressee or on the day when it has been sent to the postal address of the addressee.

The postal address is such address where the addressee receives mail regularly. Unless the addressee has determined another address or unless something else stems from the circumstances of the case, the postal address is considered to be the address of the principal place of business of the legal person or its branch office, i.e. the address of habitual residence of a natural person, or the address listed in the arbitration agreement.

If it is not possible to determine the address from paragraph 2 of this Article, it is deemed that the written document has been received if it was sent to the last known postal address of the addressee by registered mail or in another manner that provides written evidence of the fact that the written document has been sent.

Unless the parties have agreed otherwise, the written document is deemed to have been received on such day when it was handed over, pursuant to the provisions of this Article.

Consequences of Default

Article 42

Unless the parties have agreed otherwise and if, without stating justified reasons;

1) The plaintiff, after submitting a request for arbitration, fails to file the statement of claim pursuant to Article 36 paragraph 2 of this Act, the arbitration court shall discontinue the proceedings, or

2) The defendant fails to submit the statement of defense pursuant to Article 36 paragraph 3 of this Act, the arbitration court shall continue with the proceedings, while such default is not deemed to mean that the defendant admitted the statements and demands from the claim, or

3) One of the parties, although duly summoned, fails to appear at the hearing or fails to submit written evidence, the arbitration court may continue the proceedings and issue the award based on the evidence submitted.

Loss of Right to Object

Article 43

The party which, although aware that some of the provisions of this Act from whose application the parties may derogate, has not been complied with, or that some requirement which stems from the arbitration agreement has not been complied with, continues to participate in an arbitral proceeding, without filing an objection without undue delay or without filing an objection within a stipulated time period, loses its right to file the objection which it refers to non-compliance of such statutory provision or such requirement.

Witnesses

Article 44

The examination of witnesses, as a rule, takes place at a hearing.

The witnesses may be also examined without a hearing if they agree to it, and the parties also not objecting.

The arbitration court may request from the witnesses to answer the posed questions within a set time limit if the parties do not object to that.

The witnesses are examined without taking oath.

An arbitration court may not impose procedural measures or sanctions against the witnesses.

Expert Witnesses

Article 45

Unless the parties have agreed otherwise, the arbitration court may:

1) Appoint one or more expert witnesses in order to present findings and opinions on the issues determined by the arbitration court;

2) Instruct the parties to provide the expert witness with all relevant information, to present him all necessary documents, as well as to allow access to the expert witness to documents, goods, and other items.

Unless the parties have agreed otherwise, and if requested by one party or if so determined by the arbitration court, the expert witness shall, after submitting written or oral finding and opinion, participate in a hearing in which the parties may ask him questions or to which they may bring other expert witnesses to discuss the disputed issues with the expert witness.

The provisions of this Act regulating the challenge of arbitrators are applied mutatis mutandis when challenging expert witnesses.

Assistance of the Court in Taking Evidence

Article 46

An arbitration court may request court assistance in order to take evidence.

Evidence taken before a court the arbitration court assesses as evidence taken on its own.

Termination of the Arbitral Proceedings

Article 47

Arbitral proceedings are terminated by making a final arbitral award.

Arbitral proceedings may be terminated if:

1) The plaintiff withdraws his claim, unless the defendant object to that and the arbitration court assesses that the defendant has a justified reason for rendering of a final arbitral decision about the dispute;

2) The parties agree to terminate proceedings;

3) The arbitration court makes an assessment that the arbitral proceeding has become impossible;

4) The arbitral proceeding has been terminated pursuant to this Act.

Chapter VII

ARBITRAL AWARD

Awards

Article 48

Arbitration court passes a decision about the subject matter of dispute whereby it resolves the requests of the parties (final arbitral award).

Arbitration court may make a partial award or an interim award.

Award Based on Law or Equity

Article 49

Arbitration court makes an award by applying the law, i.e. legal rules, contacts, and usages.

Arbitration court may make an award based on justice and equity (ex aequo et bono, amiable composition) only if the parties have expressly agreed to that.

Applicable Law

Article 50

Arbitration court makes an award in the international arbitration by applying law or legal rules which the parties have determined by agreement.

Any referral to a law of a certain state shall be interpreted as direct referral to the substantive law of such state, and not to its conflict of laws rules, unless something else has been expressly stipulated in the agreement of the parties.

Should the parties fail to determine the applicable law or legal rules, the arbitration court in an international arbitration determines such law, i.e. rules on the basis of conflict of laws rules which it deems appropriate.

Arbitration court shall always take into account the contractual provisions and usages.

Making of Award

Article 51

Arbitral award is made in writing and shall be signed by the arbitrators, i.e. arbitrator.

Arbitral panel makes an award after deliberation in which all arbitrators shall participate, unless the parties have agreed otherwise

Arbitral panel’s award is made by a majority vote of the arbitrators, unless the parties have agreed otherwise.

Arbitral panel’s award is in full effect even if signed by a majority of arbitrators and the refusal of signatures is noted on the award.

Separate Opinion by an Arbitrator

Article 52

The arbitrator who does not agree with the award or statement of reasons for the award may separate his opinion in writing, and such opinion is delivered to the parties with the award if that arbitrator so requests.

Content of an Arbitral Award

Article 53

The award contains an introduction, award on the subject matter of the dispute, arbitration costs, and statement of reasons, unless the parties have excluded it by agreement.

The award shall state the date and place of its making.

Award Based on Settlement

Article 54

If the parties settle in the course of the proceeding about the subject matter of the dispute, the arbitration court shall, at their request, make an award based on settlement, unless the effects of such settlement are contrary to public policy.

Arbitral award on the basis of settlement has the same legal effect as any other arbitral award, except it doesn’t have to contain the statement of reasons.

Serving

Article 55

Permanent arbitral institution that has organized the arbitration serves the award on the parties, pursuant to its rules.

In ad hoc arbitration, the arbitration court serves the award on the parties.

The award under paras. 1 and 2 of this Article may be deposited at a court in the place of arbitration, at the consensual request by the parties.

Corrections, Interpretations, and Supplements to Award

Article 56

Arbitration court shall, at the request of each party, perform linguistic and technical corrections in a made award or provide certain interpretations of such award.

Arbitration court shall, at the request of a party, make a supplementary award on the requests presented in the arbitral proceedings which were not decided in the award.

Requests from paras. 1 and 2 of this Article a party shall submit no later than within a term of 30 days from the day of receipt of the award.

A decision on corrections, interpretations, and supplements is an integral part of the award that it refers to.

Serving of the decision from paragraph 4 of this Article is carried out pursuant to Article 55 of this Act.

Chapter VIII

ANNULMENT OF AN ARBITRAL AWARD

Action for Annulment

Article 57

Action for annulment may be submitted only against a domestic arbitral award.

Domestic arbitral award is such an award which has been made in the internal or international arbitration in the Republic.

A court in the place of arbitration has territorial jurisdiction to adjudicate on the claim for annulment.

Reasons for Annulment

Article 58

The court shall grant an action for annulment only if the plaintiff presents evidence that:

1) The arbitration agreement is not valid as per law which the parties have agreed to or per law of the Republic, unless the parties have agreed otherwise;

2) The party against who the arbitral award has been made was not duly informed about the appointment of the arbitrator or about the arbitral proceedings, or was not able to present its views for some other reason;

3) The arbitral award has settled the dispute which was not in the scope of the arbitration agreement or the limits of such agreement have been breached by the award. If it is found that a part of the award which breached the limits of arbitration agreement may be separated from the rest of the award, only that part of the award may be annulled;

4) The composition of the arbitration court or arbitral proceeding were not in accordance with the arbitration agreement, i.e. with the rules of a permanent arbitral institution which was entrusted with the organization of the arbitration, except if such agreement is in conflict with some provision of this Act, the compliance with which the parties may not derogate, or in absence of such an agreement, that the composition of the arbitration court or arbitral proceeding were not in accordance with the provisions of this Act, or

5) The arbitral award is based on a false testimony of a witness or expert witness or is based on a falsified document, or the award results from a criminal act of an arbitrator or a party, if these grounds are proven by a final judgment.

A court shall also annul an award if it finds that:

1) According to the law of the Republic, the subject matter of the dispute is not suitable for arbitration, or

2) The effects of the award are in collision with the public policy of the Republic.

Time Limit for Submitting an Action for Annulment

Article 59

Action for annulment of an arbitral award may be submitted within a term of three months from the day when the plaintiff received the arbitral award.

If a party filed a request for correction, interpretation, or supplement of the award, the action for annulment may be submitted within a term of three months from the day when the decision about these requests was delivered to the parties.

Stay of the Annulment Proceedings

Article 60

The court before which an action annulment is brought may, at the request of a party, stay the proceeding in order to enable the arbitration court to undertake activities which it deems necessary to remove the reasons for annulment.

Application of the Civil Procedure Rules

Article 61

The provisions of the act that regulates the civil procedure are applied to the proceedings for annulment of the arbitral award.

Advance Waiver of the Right to Sue

Article 62

The parties may not waive in advance the right to submit an action for annulment of the arbitral award.

Arbitral Proceedings after Annulment of the Award

Article 63

If the court has annulled the arbitral award on the grounds not pertaining to the existence and validity of the arbitration agreement which did not contain the names of arbitrators, such agreement is still binding for the parties, until they agree differently.

A new arbitral proceeding between the same parties and pertaining to the same subject matter may be conducted only on the grounds of a new arbitration agreement.

If there is suspicion between the parties regarding the reason for the annulment of the arbitral award, the court may rule on that issue at the requested of a party.

Chapter IX

RECOGNITION AND ENFORCEMENT OF AWARDS

Effects of the Award

Article 64

Domestic arbitral award has the power of a domestic final court decision and is enforced in accordance with the provisions of the act regulating the enforcement procedure.

Foreign arbitral award has the power of a domestic court decision after being recognized by the competent court of the Republic.

Foreign arbitral award is such a decision which is made by an arbitration court whose place is outside the Republic, as well as a decision made by an arbitration court in the Republic if foreign law has been applied to arbitral proceedings.

Jurisdiction and Procedure for Recognition and Enforcement

Article 65

A court appointed by law rules on the recognition and enforcement of a foreign arbitral award, and the territorial jurisdiction lies with the court on whose territory the enforcement is to take place.

The recognition of a foreign arbitral award may be adjudicated by a court as a preliminary question in the enforcement procedure.

The provisions of this Act do not exclude the application of the provisions of the act which regulates the enforcement procedure as regards to the jurisdiction for adjudicating on the interim measures and their enforcement.

The procedure of recognition and enforcement is initiated before the court by a request, which the party should accompany with:

1) The original arbitral award or its certified copy;

2) The arbitration agreement or a document on its acceptance in the original or a certified copy, and

3) The certified translation of a foreign arbitral award and arbitration agreement to a language which is the official use before the competent court.

Reasons for Refusing Recognition and Enforcement

Article 66

The recognition and enforcement of a foreign arbitral award may be refused at the request of a party against which it was invoked, only if such party should present evidence that:

1) The arbitration agreement is not in valid under the law which the parties have determined by agreement or under the law of the state where such award was made;

2) The party against which the arbitral award has been adjudicated was not duly notified about the appointment of the arbitrator or about the arbitral proceeding or for some other reason was not able to present its case;

3) The decision pertains to a dispute which has not been part of the scope of the arbitration agreement or the scope of such agreement has been breached by the award. If it is found that a part of the award that breaches the scope of the arbitration agreement may be separated from the rest of the award, a partial refusal of the recognition and enforcement of such award is possible;

4) The arbitration court or arbitral proceeding were not in accordance with the arbitration agreement, or if there is no such agreement, in accordance with the law of the state in which the place of arbitration lies;

5) The award has not yet become binding for the parties or such decision has been made null and void or suspended by a court of a state in which or as based on whose law the award was made.

Competent court shall refuse to recognize or enforce an arbitral award if it finds that:

1) According to the law of the Republic, the subject matter of the dispute is not suitable for arbitration, or

2) The effects of the arbitral award are in collision with the public policy of the Republic.

Effects of the Procedure for Annulment Initiated Abroad

Article 67

The court before which recognition and enforcement of a foreign arbitral award is sought may, should it deem necessary, adjourn the rendering of its award if the procedure for annulment or suspension of enforcement of that award has been initiated in the state where the award was made, or based on whose law it was made, until the conclusion of such procedure.

The court before which recognition and enforcement of a foreign arbitral award is sought may, at the request of a party, condition the rendering of the decision on adjournment of the recognition and enforcement proceedings by provision of appropriate security by the opposing party.

Decision on Recognition and Enforcement

Article 68

Decision of the court on recognition and enforcement of a foreign arbitral award shall contain statement of reasons.

Against the decision from paragraph 1 of this Article an appeal may be filed within the period of 30 days from the day it was delivered.

Provisions of the act regulating enforcement procedure are also applied to the recognition of a foreign arbitral award, when such recognition was part of the ruling on a preliminary question in the enforcement procedure.

Chapter X

FINAL PROVISIONS

Repealing of the Previous Act

Article 69

On the day of entry into force of this Act, the provisions of chapter thirty-one (Art. 468a-487) of the Civil Procedure Act ("Official Journal of the SFRY", Nos. 4/77, 36/77, 6/80, 36/80, 43/82, 72/82, 69/82, 58/84, 74/87, 57/89, 20/90, 27/90 and 35/91 and "Official Journal of the SRY", Nos. 27/92, 31/93, 24/94, 12/98, 15/98 and 3/02) are repealed.

On the day of entry into force of this Act the provisions of the Art. 97-100. of the Act on Resolution of Conflicts of Laws with Regulations of Other Countries ("Official Journal of the SFRY", Nos. 43/82, 72/82 and "Official Journal of the SRY", No. 46/96) are repealed.

Entry into Force of the Act

Article 70

This Act enters into force on the eighth day since the day it is published in the "Official Herald of the Republic of Serbia".