If the debtor does not object to the writ of execution within 5 days as from the date of serving, the writ of execution becomes final. The Law prescribes several means of enforcement for realizing a monetary claim and one of these is blockade of debtor’s banks accounts. The writ of execution is sent to the National Bank of Serbia which blocks debtor’s bank accounts in Serbia. Application for Enforcement procedure on the basis of the authentic instrument must be supported with at least invoices (in original), additional documents about the claim (contract, order, and proof of delivery) are highly recommended.
If the debtor files a timely objection against the writ of execution and makes probable reasons for objection court decision, the court passes the case to the competent court for litigation. The debtor can object to court decision for only limited scope of reasons (such as the fact that he has already settled the debt or he never ordered the goods, the claim is statute barred or the goods’ quality was challenged etc.) and must submit all proves.

Lawsuit

If a creditor files a lawsuit, it is served to the defendant who must send his reply in 30 days. In case the defendant fails to answer the lawsuit in time, the court may render a default judgement in plaintiff’s favour. Should the defendant submit his reply in time, the court will hold a court hearing. The first court hearing is usually held in a period of 45 – 85 days as from the date of filing of the lawsuit. In most cases several court hearings are necessary before the court issues the judgement. At the court hearing the court may also hear witnesses or experts.

Once the judgement is issued, it must be serviced to both parties. The losing party must reimburse to the winning party legal costs (court fee, attorney fee, translation costs etc.). The parties can appeal against the judgment in 15 days. In some cases, time period for filing an appeal is 8 days. If none of the party appeals, the judgment becomes final and enforceable. Enforcement procedure can be initiated only on the basis of a final and enforceable judgment and not sooner.

A non-resident bank account

Opening a non-resident bank account by the creditor is necessary in order to receive payments through the enforcement procedure.

Mediation and court settlement

The court always asks the parties to try to solve the dispute by mediation and mention to the litigants the possibility of amicably solving the dispute by mediation. The court also has to mention to the litigants the possibility of concluding court settlement. Text of the court settlement must be part of court’s records and settlement will be concluded when both parties sign the record after they have read the text of settlement. Concluded court settlement could be contested (denied) only by lawsuit!

Insolvency procedures

Two types of insolvency procedure can be proposedAgainst an insolvent company in Serbia: bankruptcy procedure and a reorganization procedure.
Reorganisation means satisfaction of creditors accomplished under the adopted plan of reorganisation by redefining relations between the debtor and the creditor or the debtor’s legal status, or in another manner provided for in the plan. Commonly speaking, reorganizations means writing off part of the claims and settling the rest part through the instalments during period of 4-5 years.

Bankruptcy procedure

A bankruptcy proceeding with liquidation means creditor’s satisfaction through the sale of entire assets of the bankruptcy debtor or the sale of the debtor as a legal entity. Court decision on bankruptcy is published in Official Gazette. Creditors have 120 days to lodge the claim. Application for lodgement of the claim must be accompanied with documentation about the claim (invoices, contract, and proof of delivery). All documents must be translated into Serbian language.
If the claim is disputed, the creditor must file a lawsuit within only eight days.

In most cases of reorganisation procedure claims of ordinary creditors are settled only partially and by instalments during period of 4-5 years.

Regular reorganization

A reorganisation plan shall be submitted to the bankruptcy judge no later than 90 days after the date of opening the bankruptcy. The specific way of reorganization is reorganization under the pre-packaged plan of reorganization that debtor submits concurrently with the petition for bankruptcy. This pre-packaged plan means that major creditors from each payment class have already agreed with this plan before filing of the petition. In case of bankruptcy procedure there is no need to lodge the claim.

Compulsory liquidation

If the bankruptcy procedure is conducted by a compulsory liquidation, creditors will be classified into few payment ranks. Creditors whose have claims arisen from commercial businesses are usually sorted in the 3rd payment row. Bankruptcy creditors of lower rank can only be satisfied after the creditors of a higher rank.
A claim shall be considered verified if it has not been contested by the bankruptcy administrator or any creditor by the time the investigation hearing was concluded. The bankruptcy judge shall adopt a final list of claims, based on the list drafted by the bankruptcy administrator as amended at the hearing.
The conclusion on the list of verified and contested claims shall be served to the bankruptcy administrator and each bankruptcy creditor, and shall also be posted on the court’s bulletin board. Investigation hearing should be held within the time period of not less than 30 or more than 60 days from the final day of the term set in the decision on the submission of claims.

Limitation period

General limitation period for commercial claims in Serbia is 3 years.