Arbitration in Bosnia and Herzegovina

Bosnia is a country of complex political, territorial and legal structures. It consists of two entities – Federation of Bosnia and Herzegovina (FBiH) and Republic of Srpska (RS) – and one district under the sovereignty of the state – Brčko District (BD). Except for the nine areas that fall under the exclusive competence of the State, all other areas of law are left to the entities and the district. Thus, in principle, and because of such a legal structure, different legal regimes apply in all three units. The area of civil law is largely harmonized, with almost identical acts enacted in FBiH, RS, and BD. Unlike most jurisdictions, BiH does not have a national arbitration act. Rather, it’s lex arbitri consists of several laws, which in conjunction, form the country’s national arbitration legal framework.

The starting point is the Code of Civil Procedure of FBiH, RS, and BD that which governs the civil procedure and arbitration in an identical way. The Civil Procedure Codes classifies arbitration as a ‘special procedure and places it alongside other types of ‘special procedures’ such as employment disputes or small claims. The nineteen provisions governing arbitration are not based on the UNCITRAL Model Law. This very simple framework defines the basic elements of an arbitration proceeding, such as arbitrability, the formal validity of an arbitration agreement, the constitution of an arbitral tribunal and the challenge of an arbitrator, the general power of the tribunal, the form and legal effects of an arbitral award, and the grounds and the procedure for setting aside an award. Some of these provisions are in line with internationally accepted standards, while others are not.

To complete the outlined framework it is necessary to look into the supplemental domestic acts: (a) the Law on Contracts and Torts concerning the substantive validity and other contractual aspects of an arbitration agreement; (b) the Law on Private International Law to the extent that it is relevant in the process of recognition and enforcement of foreign arbitral awards or foreign court judgments related to arbitration proceedings (if any); and (c) the Enforcement Acts of FBiH, RS and BD concerning the enforcement procedure of a domestic and a recognized foreign arbitral award. International treaties – including the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the European Convention on Human Rights – also form a part of this framework.

BiH made two declarations and a reservation to the application of the New York Convention. Bosnia will apply the Convention only to (a) awards made in the territory of another Contracting State, (b) differences arising out of commercial relationships and (c) those awards rendered after the Convention comes into force. Foreign arbitral awards that do not fall within this scope will be recognized under Law on Private International Law.