How Viaduct, a company with zero employees, sued Bosnia for €56 million

Viaduct, led by Boris Goljevscek and Vladimir Zevnik, is a Slovenian construction firm formally registered for building projects. However, its track record mainly includes small residential structures, such as homes and cottages. For over 15 years, the company has effectively been dormant, with no registered employees.

Viaduct entered the Bosnian market in 2004, following the Republika Srpska government's public tender and subsequent awarding of a concession to construct hydroelectric power plants on the Vrbas River.

To execute the project, Viaduct established a subsidiary called HES Vrbas a.d. Banja Luka, registered on July 27, 2004. Viaduct held 99% ownership, while the remaining 1% was owned by the Serbian firm “Gradjevinar” from Kraljevo.

Shortly after the concession was granted, HES Vrbas's ownership structure changed. With approval from the RS Concessions Commission, in December 2004, HES Vrbas transferred 79% of its rights and benefits to the German company MBB WS Energy GmbH based in Munich.

The new ownership breakdown of HES Vrbas was: MBB WS Energy – 79%, Viaduct (Portoroz) – 20%, and Gradjevinar Kraljevo – 1%.

MBB, as the majority owner, provided a performance guarantee worth around €1.03 million to cover the initial obligations under the concession agreement. However, this amount was far below the actual obligations — expropriation of land alone was estimated at €4.7 million, while road relocation costs were estimated at €14.5 million.

Guarantee disappears, plants never built

As reported by Nezavisne in 2016, the guarantee was supposed to be deposited with the RS Ministry of Finance. However, when journalists attempted to verify its existence, the ministry claimed it did not possess the guarantee and had no obligation to safeguard it.

Later findings revealed that no one in the RS government could account for the guarantee’s whereabouts, raising serious concerns about both the investor's credibility and the government's oversight.

Suspicion also grew due to HES Vrbas's minimal initial capital — just 51,000 marks — suggesting that the entire investment (estimated at €165 million) would need to be financed through debt. The Central Bank of Bosnia and Herzegovina confirmed that HES Vrbas's bank account had been blocked as early as 2005, pointing to liquidity issues.

The RS government signed the concession agreement with HES Vrbas in November 2004, giving it the right to build and operate two hydroelectric plants on the Vrbas River: the 48.5 MW Krupa plant and the 37.2 MW Banja Luka-Niska plant. The contract was signed by then-RS Prime Minister Dragan Mikerevic. The state-level government of BiH was not directly involved, since this was an RS-level concession — a fact that would later have legal implications.

Although the plan called for the construction of two medium-sized hydro plants south of Banja Luka, the project stalled at the outset. None of the plants were built. After the agreement was signed, HES Vrbas carried out some preparatory activities. However, local residents strongly opposed dam construction over fears of flooding the Vrbas canyon and environmental degradation. By 2005 and 2006, large public protests were organized, and a coalition of more than 20 NGOs was formed under the name "Coalition to Protect Vrbas."

Investor without funds

Alongside public opposition, it became evident that Viaduct and HES Vrbas had failed to fulfil their financial obligations under the contract. The provided guarantee (slightly over €1 million) was symbolic compared to the capital required. Moreover, no proof of a secured financing structure was ever submitted to the RS government.

Central Bank data also showed that the company’s accounts were repeatedly blocked, indicating chronic liquidity problems. Key conditions for project launch — land expropriation, road construction, and relocation of the M-16 highway — were never met.

The project stagnated for years. In 2013, the RS government awarded a new concession to RS Elektroprivreda for the construction of the Bocac 2 hydroelectric plant, just a few kilometres upstream from the planned Krupa site. Though smaller in scope, Bocac 2 occupied the same river section, which would jeopardize any future Slovenian-built hydro plants.

According to Capital news portal, the RS government violated the exclusivity clause of the original concession by signing this new agreement without a public tender and allocating hydroelectric potential to its own enterprise. This opened the door for legal action by Viaduct.

Viaduct reportedly attempted to negotiate a mutual termination of the concession with the RS government, offering to relinquish the concession in exchange for compensation. The government declined, unwilling to pay.

In September 2015, HES Vrbas formally issued a notice terminating the concession agreement, officially abandoning the hydro project. The Slovenian investor signaled its intention to pursue legal redress.

Lawsuit for unbuilt hydropower plants and government negligence

Immediately following the termination, HES Vrbas’s lawyers submitted a compensation claim in 2015 for 46 million Bosnian marks (some €24 million), citing investments and lost profits due to the RS government's breach of the concession contract. The government rejected the offer to settle.

Viaduct and its owners subsequently filed a lawsuit against Bosnia and Herzegovina before the International Centre for Settlement of Investment Disputes (ICSID) in Washington, citing the bilateral Investment Protection Agreement between Slovenia and Bosnia and Herzegovina. The claim was formally registered in 2016 (ICSID Case No. ARB/16/36), requesting compensation for the revoked concession rights and prevention of the investment.

Since RS lacks international legal subjectivity, the lawsuit had to be directed at the state of Bosnia and Herzegovina. Reports suggest that Viaduct was represented by US law firm Scrantom Dulles International and the Bosnian firm Baros from Banja Luka — an unusual detail.

Slovenian investors represented by Bosnian lawyers, BiH representation unclear

In 2017, the BiH Council of Ministers and the RS government signed a special agreement stipulating that RS would bear all costs and potential liabilities from the arbitration. Then-RS Prime Minister Zeljka Cvijanovic signed the deal.

Based on this, the BiH State Attorney's Office handed over responsibility for the case to RS institutions. RS hired another legal team, but its identity and structure were never publicly disclosed. It remains unclear who represented BiH before the ICSID tribunal in the United States.

The arbitration ended after several years. On April 18, 2022, the ICSID tribunal issued its final ruling in Viaduct’s favour, finding that Bosnia and Herzegovina — through its entity government — had violated the investment protection agreement, particularly the obligation to provide fair and equitable treatment (FET). The verdict cited RS’ refusal to issue necessary permits, its rejection of project modifications, and the unilateral granting of a concession to another entity company without a public tender — all of which obstructed the investor’s project, breaching international obligations.

Debt continues to grow

The tribunal found BiH liable and ordered it to pay damages. The award covered Viaduct’s investments, lost profits, and interest. The principal sum granted was approximately €39 million, with additional interest accruing from the contract termination date. BiH was also ordered to cover certain arbitration costs. The debt has continued to grow due to daily interest.

As of now, Bosnia and Herzegovina owes over 140 million marks (approx. €70 million), with interest accumulating at a rate of roughly €9,500 per day.

The RS government tried legal remedies to annul the ICSID decision. It initiated a request to annul the ruling through an ad hoc ICSID committee — an extraordinary legal remedy within the ICSID system. However, on May 1, 2024, the annulment committee rejected the request and upheld the original 2022 award, making it final and binding with no further avenues for appeal.

Enforcement and Eurocontrol intervention

As of mid-2023, with no compensation paid, Viaduct began legal steps for enforcement. In early 2025, the Slovenian party obtained a court order to seize funds due to Bosnia and Herzegovina from Eurocontrol — the European air traffic management organization.

Eurocontrol regularly transfers payments to Bosnia's air navigation agency BHANSA for services in Bosnian airspace. Due to the court order (presumably issued in Belgium or Slovenia), Eurocontrol suspended payments to BHANSA following the arbitration ruling in Viaduct’s favour.

In March 2025, the BiH Council of Ministers approved a proposal to settle the debt with Viaduct. The plan was to pay from the state treasury. However, on Monday, the Fiscal Council of BiH blocked the proposal to use the state budget to cover RS’s debt to the Slovenian firm.

Criminal report filed against Viaduct

In May 2024, the RS Ministry of Internal Affairs filed a report with the RS Public Prosecutor’s Office against three unnamed individuals and the legal entity Viaduct. The report alleges abuse of official position or authority, causing 76 million marks (some €39 million) in damages to the RS budget.

Authorities are investigating whether any illegal actions occurred during the awarding or termination of the concession. No indictments have been filed, and the names of the suspects remain unknown. Many interpret the move as an attempt by RS authorities to shift blame onto individuals or the investor.