AMENDMENTS TO THE CIVIL PROCEDURE LAW

AMENDMENTS TO THE CIVIL PROCEDURE LAW

On November 9, 2018, the National Assembly of the Republic of Serbia passed the Law on Amendments to the Civil Procedure Law (“Official Gazette of the Republic of Serbia” No. 72/11, 49/13 – US, 74/13 – US, and 55/14), hereinafter referred to as “the Law.”

The only amendment introduced by this Law pertains to Article 204, consisting of the following changes:

1. A person who has acquired from the defendant the object or right that is the subject of litigation may enter the lawsuit in place of the defendant, provided both parties agree.
2. A person who has acquired from the prosecutor the object or right that is the subject of litigation may enter the lawsuit in place of the prosecutor, based on the prosecutor’s written consent submitted to the court.
3. The provision of Article 204, paragraph 3, of the Civil Procedure Law, which regulated the validity of the judgment concerning the acquirer of the object or right, has been removed.

Under the amended Law, no additional request is required from the defendant for another person to enter a lawsuit in place of the prosecutor, who has acquired the object or right in question. Now, the prosecutor’s consent alone suffices for such a substitution.

The National Assembly of the Republic of Serbia enacted this amendment to address issues arising during the sale of problematic loans.

One significant challenge involved the sale of problematic loans by banks during ongoing litigation in which the bank acted as the prosecutor. The Commercial Court of Appeal previously held that ongoing court proceedings must be completed in such cases. It also stated that if a problematic loan was sold, the bank would ultimately lose its position in the case. This created practical challenges, requiring the new owner of the problematic loan to initiate a separate dispute, thereby discouraging potential buyers from acquiring problematic loans.

The earlier legal requirement, which mandated the defendant’s consent for a person purchasing a problematic loan to enter the lawsuit, was identified as a significant obstacle to developing the market for such loans.

To address this issue, the Government proposed amending the Civil Procedure Law as part of its Strategy for Problem Loans (“RS Official Gazette” No. 72/15).

Attorney at Law Damir Petrović

The information provided herein is intended for general informational purposes only and should not be construed as legal advice. Accordingly, the Law Firm Petrović Mojsić & Partners disclaims all responsibility and accepts no liability for actions taken or not taken based on the content of this publication.