Category: Serbia

Kinstellar has advised Korea’s Kyungshin Cable on the construction of a 12,000-square-meter factory in the Serbian town of Smederevska Palanka, approximately 80 kilometers south of Belgrade. The investment is valued at over EUR 20 million.

The new factory will launch in 2021 and produce components for both traditional cars and electric cars and batteries. Kyungshin Cable has said that it plans gradually to employ up to 700 people at the new facility.

Kinstellar’s team was led by Partner Selma Mujezinovic and Associate Ksenija Sorajic Bakovic and included Senior Associate Andreja Vrazalic and Associate Milan Radonic.

Serbia counts more than 12,000 blind and visually impaired people, who are struggling to reach texts and other visual content. To improve their position, Serbia adhered to the Marrakesh Treaty, which is in force as of 24 May 2020.

This treaty requires contracting parties to introduce a standard set of limitations and exceptions to copyright rules. These should enable reproduction, distribution and making available of published works in formats designed to be accessible to visually impaired persons and to allow the exchange of these works across borders by organisations that serve those beneficiaries.

Suitable limitations and exceptions are already available under the current Law on Copyright: copyright-protected works may be adapted so that persons with disabilities can use them. There is no need to obtain an authorisation from the copyright holder, nor to pay a royalty.

The Marrakesh Treaty provides an additional level of certainty and strengthens the position of persons with visual impairment and prevents easy changes to these benefits in the future.

The treaty is administered by the World Intellectual Property Organisation (WIPO). WIPO is leading the Accessible Books Consortium (ABC), which has a goal is to increase the number of books worldwide in an accessible format. By now 415,000 titles are available in an accessible format at this platform. There is more to be done because less than 10% of the titles published worldwide are available in accessible formats.

WIPO also published the text of the Marrakesh Treaty in Braille format on its web page.

By Nikola Kliska, Senior Associate, independent Attorney at Law in cooperation with Karanovic & Partners

Entities regularly enter into contractual relationships striving to exercise the rights and obligations specific for a particular relation, in a manner previously defined by the meeting of minds within the limits of mandatory regulations, public order and best practice. When concluding a contract and exercising rights and obligations from such relationship, the parties shall abide by the principles of fairness and diligence.

Article 17 para. 1 of the Law on Contracts and Torts of the Republic of Serbia (“LCT”) stipulates that the parties in a contractual relationship shall be obliged to fulfil their obligation and that they shall be responsible for its fulfilment. At the same time, the parties shall be obliged to fulfil their obligations with the diligence required for the particular contractual relation in a legal transaction, for the purpose of proper and timely fulfilment of obligations.

However, it often happens in practice that a legally perfect obligation from a valid contract is not fulfilled or it is fulfilled with delay, in which case the rule from Art. 17 para. 1 of the LCT raises a question of liability of the obligor concerned.

The principle of “causing no harm” (neminem laedere) contained in Art. 16 of the LCT establishes a general obligation to restrain from actions that may cause damage to other person. Failure to fulfil a contractual obligation or delayed fulfilment may cause damage to the obliged, hence this principle is applicable in the domain of contractual liability and it supplements the rule from Art. 17 para. 1 of the LCT.

The content of the contractual liability institute is defined in Art. 266 para. 2 of the LCT and it is exhausted by obligor’s obligation to compensate the creditor for damages caused by contract infringement. The obligor shall not be liable for such damages only in exceptional cases. If he failed to use the possibilities of contractual limitation and exclusion of liability, the obligor may be relieved of damage liability only by application of rules from Art. 263 of the LCT. This means that the obligor shall have to prove that the proper fulfilment of contractual obligation was impossible due to the circumstances that arose after the conclusion of contract which he could not prevent, eliminate or avoid.

Contractual extension of obligor’s liability

In accordance with Art. 264 para. 1 of the LCT, a contract may extend the obligor’s liability to include the cases that he is otherwise not liable for. In such cases, in regular circumstances and in the absence of special contractual provision, the obligor would not be liable by application of general i.e. legal basis for relief from liability. The obligor is here obliged, seemingly against his clear economic interest, to compensate the obliged for the damages even in situations when he might be relieved from such liability with reference to the legal provision on relief from such liability, and thus preserve certain value for his assets.

Nevertheless, such contractual provisions are often a response to special arrangements stipulated in the contract in the interest of the obligor (price, deadlines, etc.), wherefore the obligor undertakes enhanced liability. In order to prevent misuse related to these provisions, in para. 2 of the same Article the legislator limited the application of rules from para. 1 by stipulating that fulfilment of the provision on extension of liability may not be required if it would contravene the fundamental principles of diligence and fairness.

Therefore, in situations where contractual provision on extension of liability is not a consequence of reciprocity and exchange in a contractual relationship i.e. it is not agreed in good faith but rather results from misuse of power by one party, the law enables the obligor to use court mechanism and enforce protection against the other party’s request for damages in the part that exceeds lawful limits of liability.

Contractual exclusion of obligor’s liability

With regard to contractual exclusion of liability, the law undeniably permits exclusion only in relation to ordinary negligence. Obligor’s liability for intent and utmost negligence cannot be excluded in advance by contract, as per Art. 265 para. 1 of the LCT. What is more, the contractual provision on exclusion from liability relating to ordinary negligence may even be annulled in court at the request of the interested party, which will by default be the economically underprivileged obligor from the main transaction, given that such arrangement resulted from the monopoly position of the obligor or generally from the unbalanced relation between the parties.

Contractual limitation of obligor’s liability

The law recognises contractual limitation of liability according to the amount of compensation. Article 265 para. 3 of the LCT thus stipulates that the contractual provision specifying maximum compensation shall be valid if such amount is not in obvious disproportion to the damage and if not otherwise foreseen for a particular case. Although it may appear that this provision substantially relieves the obligor from obligation to prove the amount of sustained damages and that by its negotiation he would assume a more favourable position in court proceedings, this is nevertheless not the case.

The actual scope of Art. 265 para. 3 of the LCT is limitation of liability in terms of limiting the obligor’s liability for certain amount even when the real damages exceed it. In such case and in order to fully exercise his claim, the creditor would have to prove that he had sustained the damages up to the agreed limit because he voluntarily waived the possibility to claim damages that exceed such amount. By linguistic interpretation of the same provision, we came to the conclusion that maximum compensation (rather than the compensation as such) is agreed in this particular case, which means that the compensation amount may even be lower than the limited one if the sustained damage was less.

Therefore, by such contractual provision the burden of proof (that the damages sustained by the creditor were below the agreed limit) is not transferred to the obligor, but the creditor would still have to prove the amount of the damage sustained. This provision is favourable for the obligor in terms of limited liability and not for the creditor in terms of relief from the obligation to propose and present the evidence as regards the circumstance of damage amount.

Nevertheless, even in case of limited compensation amount, the creditor might still be entitled to full damage compensation if the inability to fulfil the obligation was caused on purpose or by gross negligence of the obligor (Art. 265 para. 4 of the LCT).

This article is to be considered as exclusively informative, with no intention to provide legal advice.
If you should need additional information, please contact us directly.

By Ivana Ruzicic, Managing Partner, PR Legal

NKO Partners has advised industrial real estate developer CTP on its EUR 2.1 million acquisition of six hectares of land in Kragujevac, Serbia, from the City of Kragujevac.

NKO Partners reports that the land is intended for industrial development.

The NKO Partners’ team was led by Partner Djordje Nikolic.

Karanovic & Partners has advised Canadian precious and base metals exploration company Tethyan Resource Corp on its acquisition of ten percent of the shares and management control over the of the Serbian geological company EFPP. NKO Partners advised EFPP on the deal.

According to Karanovic & Partners, “with this move, Tethyan secured the exclusive right to purchase the remaining 90% of the shares at some point in the next 12 months. With EFPP being the holder of two exploration licenses over former silver-zinc-lead mines Kizevak and Sastavci in Serbia’s Southwestern district of Raska, Tethyan plans to begin drilling in Kizevak in early June.”

Karanovic & Partners team was led by Partner Petar Mitrovic and included Junior Associate Katarina Tomic.

NKO Partners’s team was led by Partner Djuro Otasevic.

The Supreme Court of Austria has recently passed a decision whereby it ordered an employer to compensate the employee for non-material damages in the amount of EUR 2,400.00 (cca EUR 400.00 per month of monitoring), as the company vehicle used by the employee was equipped with GPS system for monitoring without appropriate legal ground. The court deemed that the use of GPS tracking system affected the employee’s privacy and thus created basis for damage compensation.

“By using the GPS positioning system in the plaintiff’s company vehicle during his working hours (and leisure time), the defendant unlawfully and culpably (intentionally) encroached on the plaintiff’s private sphere, namely his very personal sphere of life. Since the intensity and extent of the violation also constituted a considerable violation of the plaintiff’s private sphere, the plaintiff was entitled to non-material damages under § 1328a Austrian Civil Code (ABGB).” (unofficial translation of the court decision into English)

Although this decision was passed without GDPR application – since the time schedule of employee’s monitoring refers to the period before the GDPR application started (i.e. before May 2018), it is certainly significant for the reasons that the court included in the rationale.

“[…] Thus, on the one hand, the interests of the employer, who in the employment relationship has a fundamental right to control the employees, but in addition, for example, also wants to secure and protect his property, and on the other hand, the interests of the employee in safeguarding his personal rights must be weighed against each other. The principle of proportionality has a regulatory function here. Personal rights may only be restricted to the extent that this is required by a legitimate interest of the employer in control. The most gentle – still effective – means must be chosen (9 ObA 23/15w Pkt 8. mwN; cf. RS0116695).” (unofficial translation of the court decision into English)

The court indicated the application of proportionality principle upon the introduction of technical measure of monitoring, as well as that an employee’s privacy may only be restricted to the extent that is required by a legitimate interest of the employer.

Processing of employees’ data through GPS tracking system in the Republic of Serbia

A large number of employers in the Republic of Serbia equipped their company vehicles with GPS tracking systems, the reasons for this being various. Employers are often guided by safety reasons, i.e. to be able to establish the location of their property (vehicles) in the event of unauthorised use, but the installation of GPS tracking system is also frequently motivated by desire to monitor the employees’ task performance, usually of those working in the field (e.g. sales representatives).

Alike processing of other types of data, this processing must also be based on one of the legal basis prescribed in Article 12 of the Law on Personal Data Protection (“LPDP”). Generally speaking, employee’s consent would not be considered adequate basis in this case. What is more, the consent will rarely be a relevant basis for processing employees’ data, considering the “imbalance of power” that exists in every employment relationship. It would be less probable for an employee to deny consent without fear or imminent risk from the consequences on his/her employment status (see e.g. guidelines of the European Data Protection Board: Guidelines 05/2020 on consent under Regulation 2016/679 or guidelines of the UK Information Commissioner’s Office: The Employment Practices Code). Such “consent” would not meet the criteria of voluntariness, i.e. it could not be considered as freely given in terms of the LPDP.

Accordingly, an employer should consider whether the processing is necessary for the purpose of achieving his legitimate interests which are not prevailed by the interests or fundamental rights and freedoms of an employee. If an employer based processing on his legitimate interest, such interest would have to be clearly specified and defined as well as notified to an employee in line with the LPDP.

Data protection impact assessment in the Republic of Serbia

Under the LPDP, a controller shall be obliged, before the outset of processing, to assess the impact of the envisaged processing operations on personal data protection, given the probability that certain form of processing, notably by use of new technologies and considering the nature, scope, circumstances and purpose of processing, would impose high risk on rights and freedoms of natural persons.

By-law enacted by the Commissioner for Information of Public Importance and Personal Data Protection of the Republic of Serbia (“the Commissioner”) specifies a list of personal data processing operations that require impact assessment as regards personal data protection and the opinion of the Commissioner. Among other, it is stipulated that impact assessment shall be done in case of employees’ personal data processing by the employer by means of applications or systems for monitoring their work, movement, communications etc.

This means that data processing via GPS tracking system requires a data protection impact assessment.

Impact assessment shall include at least:

• A comprehensive description of the envisaged processing operations and the purpose of processing, including the description of controller’s legitimate interest, if any;
• Assessment of the need and proportionality of processing operations compared to the purpose of processing;
• Risk assessment as regards the rights and freedoms of the subjects of data;
• The description of intended measures regarding the risk and including protection mechanisms, as well as technical, organisational and personnel measures aimed at personal data protection and provision of evidence on compliance with the LPDP, taking into account rights and legitimate interests of data subjects and other persons.

If the controller has appointed a personal data protection officer (“DPO”), the controller shall be bound to require the DPO’s opinion with respect to impact assessment.

Having performed an impact assessment and before the outset of personal data processing, the controller shall be obliged to request an opinion from the Commissioner.

Failure of the controller to perform the risk assessment and to request the Commissioner’s opinion constitute misdemeanor under the LPDP, for which the following fines may be imposed: from 50,000.00 to 2,000,000.00 dinars (legal entity), from 5,000.00 to 150,000.00 dinars (responsible person in legal entity) and from 20,000.00 to 500,000.00 dinars (entrepreneur).

This article is to be considered as exclusively informative, with no intention to provide legal advice.
If you should need additional information, please contact us directly.

By Ivana Ruzicic, Managing Partner, PR Legal

NKO Partners has advised Dr. Max, the largest pharmacy network in Central Europe, on a public-private partnership project involving the concession of 27 state owned pharmacies located in the City of Krusevac and the Rasina District of Serbia.

Dr. Max’s 15-year concession agreement was executed on May 15, 2020.

The NKO Partners team was led by Partner Djuro Otasevic and Senior Associate Milica Boskov.

Samardzic Oreski & Grbovic has advised Bravos Holding on the acquisition of a high-class office building in Belgrade from DUTB.

SOG’s team included Partners Radovan Grbovic and Milos Gledovic and Senior Associate Milan Novakov.

SOG was unable to provide additional information about the deal.

The Government of the Republic of Serbia amended the Decision Declaring Covid-19 Disease Caused by Sars-Cov-2 Infectious Disease.

As of today, all persons entering the Republic of Serbia are, in the course of passport control, given a written notice – a bilingual health warning, in Serbian and English, about the measures to be followed to prevent the occurrence, spread, and control of the infectious disease COVID-19. The measure of isolation, as well as the obligation to have a negative PCR test not older than 72 hours and permission to enter and/or transit issued by the Government body do not exist in the amended Decision.

Foreign citizens whose temporary stay in the Republic of Serbia expired after the day of declaring a state of emergency in the Republic of Serbia may enter the Republic of Serbia no later than July 1, 2020, and legally submit a request for extension of temporary stay within 30 days from the day of entry into the Republic of Serbia. It is considered that the abovementioned temporary stay of a foreign citizen is valid at the time of his entry into the Republic of Serbia and that until the end of the procedure on the submitted request for extension of temporary residence, the foreign citizen legally resides in the Republic of Serbia.

The Decision is published in the Official Gazette of the Republic of Serbia and has entered into force on 22 May 2020.

By Jelena Nikolic, Partner, and Andrea Cvetanovic, Senior Associate, JPM Jankovic Popovic Mitic

BDK Advokati has been appointed to act as the local representative for Google under the Serbian Data Protection Act.

According to BDK Advokati, “the data subjects may continue using established channels to directly contact Google regarding the rights under the Serbian Data Protection Act through the Google Privacy Help Centre where users can find webforms including the Data Access Request Form or the Privacy Inquiry Form. The Google Privacy Help Centre also allows the data subjects to manage their privacy, check what data Google collects and uses, and find answers to many common questions about privacy and user data related to Google’s products and services.”