By a Ruling of the Commercial Court of Zagreb (Republic of Croatia) dated January 22, 2025, the award of the arbitral tribunal in the case administered by the Arbitration Centre at the RSPP was recognized in Croatia. As stated by the Court, as a result of the recognition, the arbitral award “is equated with the award of an arbitration court in the Republic of Croatia”.

The first to report on the Ruling of the Commercial Court of Zagreb was Alexander Kostin, an arbitrator of the International Disputes Panel of the Arbitration Centre at the RSPP who made the relevant publication in his Telegram channel LetterRogatory v.2.

The Arbitration Centre at the RSPP received the described Statement of Claim in early April 2020, in the middle of the Covid-19 pandemic. Despite the Respondent’s location in Croatia and its evasion from receiving the documents about the commencement of arbitration, the Secretariat of the Arbitration Centre at the RSPP managed to duly notify the Respondent, whereafter it elected an arbitrator and submitted a position on the merits of the dispute. Since the Parties were located in different countries and the arbitrator chosen by the Respondent was in Italy, the oral hearings were conducted remotely, using a secure video-conference system introduced before the pandemic. The arbitral award was rendered by the panel of arbitrators as early as February, 2021. The claims were partially satisfied.

In its act, the Commercial Court of Zagreb examined in detail the objections of the interested party (the Respondent in arbitration) to the recognition of the arbitral award in Croatia and covered in the text of the document, inter alia, the following questions: is legalization of a foreign arbitral award necessary? What are the requirements for the translation of an award and the related case file? Is a State court authorized to review on the merits an arbitral award on the grounds that it may contradict the public policy of a country?

The Court noted that the arbitration clause had been agreed upon by the Parties and that it also contained a provision stating that the award was final and binding and that it was not subject to challenge. According to the Commercial Court of Zagreb, the subject matter of the dispute was arbitrable under Croatian law, the award was made in a dispute arising out of commercial relations of an international character, and the Court did not find that it had exclusive jurisdiction over such a dispute.

The Commercial Court of Zagreb stated that the arbitral award is of a private law nature and therefore the rules established by the Law on Legalization of Documents in International Traffic (“Narodne novine” No. 53/91) and the 1961 Hague Convention on Abolishing the Need for Legalization of Foreign Public Documents do not apply to it.

The Court emphasized that, although the interested party’s reasoning on the formal requirements for a translation might be relevant for the purposes of transparency, it could not be insisted upon, since non-compliance with certain formalities did not affect the court’s conviction of the authenticity of the certified translation, and thus a different approach would be excessively formalistic. However, in considering the submission of a partial translation of the relevant contract, the Court found such materials to be sufficient, since the submission of a translation of only certain sections of the contract was sufficiently justified and understandable.

The Commercial Court of Zagreb refused to consider the interested party’s objections concerning the merits of the dispute, noting that “within the framework of the proceedings for the recognition of a foreign arbitral award, the court is not authorized to examine the correctness of the application of substantive law and the correctness of the established facts when issuing the arbitral award… the court is not authorized to decide again on the claims of the plaintiff and the defendant that have already been finally decided in the foreign arbitral award in question, and the disagreement of the party with the legal positions of the arbitral tribunal in this case does not indicate that the recognition of the award would be contrary to the public policy of the Republic of Croatia”.

Moreover, the Commercial Court of Zagreb defined public policy as “a set of fundamental principles of the political, social and economic life of a certain country expressed in mandatory legal and moral rules, without which the political and legal integrity of a certain social order would be called into question”.

The Court also focused on fair hearing rights in videoconference hearings, the scope of the state court’s authority to assess the accuracy of the oral hearing transcript, and other procedural subtleties.

The original text of the judicial act is available on the search engine page for judgments of the courts of the Republic of Croatia, and this link provides its translation into English.

It is also noteworthy that the Arbitration Centre at the RSPP administered parallelly several cases between the same Parties arising out of different contracts. Earlier – back in March, 2024 – an arbitral award in another arbitration dispute was also recognized and enforced in Croatia, whereof we became aware in March this year. The act of the Croatian court in this case is not publicly available.