On 5 August 2014, the National Assembly of the Republic of Serbia enacted a new Privatisation Law ("New Law"), which came into force on 13 August 2014.
The New Law prescribes for the privatisation process to be completed before 31 December 2015. The four models of privatisation that have been prescribed include sale of capital, sale of assets, transfer of capital without compensation and strategic partnership. It also allows for the possibility to combine these models. The New Law additionally introduces the possibility to initiate insolvency proceedings over the subjects of privatisation where no potential buyers have expressed interest, thus finally resolving their fate.
Of particular interest are the rules which concern the creditors of companies under restructuring. This is especially so considering the decision of the Constitutional court that declared the provision from the previous Privatisation Law that protected companies in restructuring from enforcement as unconstitutional. Despite the stand taken by the Constitutional Court, the New Law has once again extended the deadline for the initiation of enforcement proceedings against a company in restructuring. This deadline is now 315 days from the date that the New Law comes into force and enforcement proceedings cannot be commenced until it expires on 24 June 2015. However, it will remain to be seen what stand the Constitutional Court will take in regard to this provision.
The New Law also establishes a new deadline by which the Privatisation Agency must decide upon requests for the payment of claims that were filed in accordance with the previous Law on amendments of the Privatisation Law, which was enacted in May this year. According to the New Law, the Agency should decide upon this request within 135 days from the day of the New Law coming into force, i.e. by 26 December 2014.
Another new provision introduced by the New Law is the possibility to initiate pre-packed insolvency ("UPPR") over the subjects of privatisation.
It should be noted that the New Law remains ambiguous regarding many issues. For example, it is unclear what happens in situations where a creditor does not agree with the proposal of the Privatisation Agency on the settlement of a claim. Also, the formulation of the New Law leaves the possibility to be interpreted in a manner that even the creditors that had not filed a request to the Privatisation Agency in accordance with the previous amendments of the law, could initiate enforcement proceedings after the deadline prescribed by the New Law expires. It remains to be seen what stand will be taken in practice on these ambiguities.