Montenegro Faces Million-Euro Arbitration Over Sveti Stefan Hotel
Introduction: Shocking Ruling and Million-Euro Costs Montenegro is under the hammer of a million-euro arbitration and court costs amounting to €620,000 that it must pay to Adriatic Properties, the lessee of the exclusive Sveti Stefan and Miločer hotels. This London court decision is just the tip of the iceberg of legal and political troubles that have been brewing for years, resulting in a financial burden on the state that will last for decades.
How Did This Happen? It all started back in 2007 when Montenegro granted a long-term lease of the Sveti Stefan, Miločer hotels, and associated beaches to the Greek company Adriatic Properties, owned by businessman Petros Statis. After the change of government in August 2020, local activists and the new authorities removed fences from the hotel beaches, demanding free access to the shore. In response, Adriatic Properties closed the hotels before the start of the summer season that year.
Court Battle: Million-Euro Lawsuit and Counterclaim The company then sued Montenegro at the London arbitration court, seeking compensation of around €100 million for alleged breach of the lease agreement. Montenegro responded with a counterclaim, citing protection of public interest, state property, and citizens’ rights. In 2023, the court consolidated both claims into one arbitration proceeding that has been ongoing for over three years.
Partial Decisions and Financial Blow At the beginning of 2024, the court issued two partial arbitration decisions. Among them was Montenegro’s request to reopen the hotels, which the court rejected. The court also allowed Adriatic Properties to recover €620,000 in legal costs from Montenegro, adding another financial blow to the state budget.
Political and Legal Mistakes That Cost the State Investigations reveal that inadequate case management and wrong legal moves paved the way for this ruling. The arbitration was handled in 2020 by Vasilije Čarapić, now a member of the Europe Now movement, during Jakov Milatović’s tenure. This situation casts a shadow over Montenegro’s legal system and political accountability.
Connections with Celebrities and the Hotel’s Future Adriatic Properties has again come into the spotlight after its owner Petros Statis hosted a lunch with top tennis player Novak Djokovic, fueling speculation about Djokovic’s intention to permanently relocate to Montenegro and invest in the destination.
Conclusion: Who Pays the Price? Montenegro faces a multi-decade financial burden due to poor handling of the legal case surrounding the Sveti Stefan hotel. While the state tries to protect public interest, million-euro costs and loss of control over this exclusive tourist gem cast a shadow over Montenegro’s tourism future.
What do you think? Is this just the beginning of financial troubles, or will Montenegro manage to pull itself out of this legal swamp? Drop your thoughts, maybe together we’ll find a solution or at least a good joke about the whole mess! 😉
