Arbitration is growing in popularity in Kosovo and notable legislative updates are now in place, including the one establishing the Commercial Court, according to Boga & Associates Partner Sokol Elmazaj.
"Going through the events this year, there have been some notable legislative changes," Elmazaj begins. "In June, a new Law on Protection of Competition was adopted ensuring approximation of the latest EU directives, and improving the clarity of the conditions triggering companies' obligation to file for merger control clearance with Kosovo's competition authority. There is new legislation adopted on the protection of trade secrets, patents, and industrial design."
According to Elmazaj, there are some pending pieces of legislation as well. "We have an older initiative to adopt Kosovo’s Civil Code. While we do have a separate law on obligation relationships (i.e., torts and contracts), real rights and security interest, etc., we still don’t have a civil code. It has been pending in the parliament for a while now and we don’t expect any big changes soon," he says.
Still, Elmazaj notes that one of the most interesting fields in Kosovo is arbitration. "We’ve had the arbitration body in Kosovo for over ten years, but now there is an increased number of arbitration cases brought by local businesses," he says. "It is a good development – we are finally seeing the fruits of a long marketing campaign made by the American Chamber of Commerce and funded by USAID in Kosovo, including training of judges and lawyers. Both the American CoC of Kosovo and the Kosovo CoC have done a good job of introducing arbitration as an alternative dispute resolution tool. As a result, companies have massively started including arbitration clauses in their contracts."
According to Elmazaj, earlier this year, the parliament passed a new law establishing the Commercial Court in Kosovo, "Hopefully, it can also help address disputes of a commercial nature promptly," he says. "It’s still too early to reach conclusions, but we see that the cases are picking up."
"We have some progress on wind farms," he says, noting that "energy remains critical in Kosovo, as local energy generation is still suffering. The biggest generator is the state-owned Korporata Energjitike e Kosoves SH.A. There are few small private generators, and the rest of the energy is imported. The imports can fluctuate, as the generation facilities are old and hard to maintain. The government provided some subsidies last year and we hope it will happen this year as well." According to him, one of the pressing issues looking for a political solution is the energy problem in the four northern communes of Kosovo. "This remains part of a broader issue to be resolved with Serbia. In these last weeks, we saw some developments and, hopefully, both parties will be able to find common grounds, calm the situation down, and work out solutions to make this region safer for businesses."
"Unfortunately," he adds, "we haven’t seen an increase in the FDIs in Kosovo. Foreign investors with big names, such as Zara in the fashion industry, decided to include Kosovo in their maps, but still, these are rare cases." However, he points to "the good sign that the EBRD and IFC are financing projects in Kosovo, especially for small and medium-sized businesses. The trust of these organizations in our local economy is an important aspect here, proving that Kosovo is slowly moving forward."
