The debt of Republika Srpska to the Slovenian company "Viadukt," amounting to BAM 91 million according to an arbitration ruling dated April 18, 2022, increases daily by BAM 17,848 due to accruing interest.

Despite the ruling being final and without further legal recourse, authorities have taken no action to resolve the issue or negotiate a payment plan to halt the accumulating interest, reports CAPITAL.

Predrag Baros, an attorney from the law firm “Baros, Bicakcic & partners,” stated that since the final ruling on May 1 of this year, they have repeatedly contacted the Council of Ministers of Bosnia and Herzegovina for compensation, but without success.

“We have approached the Council of Ministers because Bosnia and Herzegovina was the defendant, but they are deferring responsibility to the Government of RS, with which the Council has a signed agreement for settling this debt. Our latest correspondence was sent on July 26, and we hope for a response soon,” Baroš told CAPITAL.

Baros emphasized that the authorities’ inaction is irresponsible to the citizens, who will ultimately bear the financial burden.

He recalled that a year after initiating the arbitration, the Government of RS and the Council of Ministers of BiH signed an agreement obligating RS to cover all arbitration costs, but this agreement does not alter the obligation to pay the arbitration award.

“We clearly and unequivocally communicated this to the Council of Ministers, the BiH Prosecutor's Office, and the Ministry of Finance and Treasury through several submissions, the latest of which was on July 26,” Baros noted.

Since their first correspondence on May 8, the law firm has sent additional letters on May 23, May 31, June 14, June 28, and July 26, without receiving any response.

“We also addressed the Ministry of Finance and Treasury of BiH, the House of Peoples, and the House of Representatives to highlight that the adopted Budget Law for 2024 does not reflect BiH's obligations under the arbitration ruling. This means that the competent authorities knowingly adopted a budget law that does not accurately represent BiH's international obligations, effectively making it a forged regulation,” Baros assessed.

According to him, BiH's obligation to Viadukt under the arbitration ruling constitutes an international obligation and should have been included in the adopted budget law.

“Even if the budget does not allocate funds for this obligation, it does not change the fact. The obligation must be recorded as part of BiH's international obligations, and the competent authorities must secure funds to fulfill it. Our client is indifferent to whether it is resolved this year because the accruing high interest, currently at a daily rate of BAM 17,848, protects his interests, with the total compensation growing from less than BAM 92 million to over BAM 105 million,” Baros concluded.

Republika Srpska owes the Slovenian company “Viadukt” compensation for the unilateral termination of the concession agreement to construct hydroelectric plants on the Vrbas River.

The arbitration was initiated after “HES Vrbas,” which was supposed to construct the hydroelectric plants, filed a BAM 46 million compensation claim with the Government of RS in October 2015. As no agreement was reached, the majority owner of HES, Slovenian “Viadukt,” filed an arbitration claim against BiH in Washington in 2016.

A year after initiating arbitration, the Government of RS signed an agreement with the BiH Council of Ministers obligating RS to cover all arbitration costs.