TrustHLT/LaCour huggingface dataset:
GR2 (Government): A petition to Slovenian Constitutional Court for the constitutional review of the provisions of the Constitutional Act would also be in vain since the provision of this constitutional act cannot be subject to such a review.
GR2 (Government): Additionally, the remedy Croatia offered before its courts, that is civil action against Ljubljanska Bank, is unenforceable in Slovenia because Slovenia has explicitly denied that possibility.
GR2 (Government): The fact remains that the Republic of Slovenia did not provide a single piece of evidence capable of proving that various remedies it claims effective have never resulted in payment of all foreign currency savings to applicants or any other savers in the same legal position.
GR2 (Government): As regards discrimination, the 1994 Constitutional Act differently treated only one category of savers, that is savers of the bank who invested in Ljubljanska Bank in their branches in Zagreb, Sarajevo, and Skopje.
GR2 (Government): Although they entered into the identical contractual relationship based on the same legislation with the Ljubljanska Bank as those savers who deposited their money on territories of Slovenia, only the non-Slovene savers were explicitly denied return of their savings and were denied of effective legal remedies to pursue their claims before the court.
GR2 (Government): In such different treatment, Republic of Slovenia has not objectively and reasonably justified, neither they are proportional as to the means employed and the aims sought to be realized.
GR2 (Government): Therefore, the applicants in this case and 8,000 other applicants before the court, as well as many other savers who are in the same position as applicants, had no other opportunity but to seek justice before this court.
GR2 (Government): The government points out that the Slovene Bank collected foreign currency savings from citizens of other republics of the former Yugoslavia over a period of about 30 years, disposed of them freely, invested them, and earned profit.
GR2 (Government): Precisely because this method before the court is of private law nature, and because the fact that savers' foreign currency deposits survived the solution of Sarajevo, the measures taken by Slovenia directly violated its obligations under convention.
GR2 (Government): In the same circumstances, Republic of Serbia took similar measures in respect of Invest Bank.
GR2 (Government): Therefore, Slovenia and Serbia should be held liable for a violation of the rights to peaceful enjoyment of property, right to effective remedy, and the right not to be discriminated against in the case before the court.
GR2 (Government): Honorable judges, in order not to repeat arguments relevant to this case, we will align ourselves with the Bosnian-Herzegovina pleading just side.
Dean Spielmann (JudgeP): Thank you, Miss Stažnik.
Dean Spielmann (JudgeP): I call now Mr. Carić.
GR6 (Government): Honourable judges, the assumption of the liability of the Republic of Serbia in this case is based on two grounds. The fact that Tuzla branch was a branch of Investbanka and that
GR6 (Government): the seat of Investbanka was in Serbia. And the fact that most of the funds of Investbanka
GR6 (Government): Tuzla branch most likely ended up in Serbia. Accordingly, the respondent will refute both
GR6 (Government): the assumptions. The question before us deals with foreign currency savings that were guaranteed
GR6 (Government): by the SFRY. These guarantees are recognised as a part of financial liabilities of the
GR6 (Government): SFRY as it is specifically regulated by the agreement on succession issues concluded between the respondent states in Vienna on 20 June 2001. What is more, Article 7 of the agreement
GR6 (Government): precisely deals with these guarantees prescribing the obligation of the successor states to negotiate the issue of hard currency savings. The question of the old foreign currency savings
GR6 (Government): is undoubtedly a question to be solved with regard to the law of succession. Even though
GR6 (Government): some of the respondent states in this case have tried to show that this matter should be dealt with as a private law matter between a bank and its clients, it has been clear that this issue has long left the realm of private law. For this, it is irrelevant that
GR6 (Government): SFRY guarantees for the deposits were never activated. The savings became the matter of
GR6 (Government): public debt, explicitly recognised by the laws passed in each of the successor states.
GR6 (Government): The states became liable for the savings directly, not because those were state-owned banks, but because the laws obliged the states to recover the savings. The only legal basis
GR6 (Government): in international law that deals with the issue of SFRY, old foreign currency savings, is the Vienna Succession Agreement from 2001. The legitimacy of this agreement was recently
GR6 (Government): confirmed through the Memorandum of Understanding concluded in March 2013, which states that the settlement for the transferred foreign currency savings of Ljubljana's bank in Croatia will be found on the basis of the Agreement on Succession Issues. Nevertheless, both Bosnia
GR6 (Government): and Herzegovina and Croatia tried to show that Annex C of the Succession Agreement is not applicable in the case of old foreign currency savings. This endeavour is entirely
GR6 (Government): understandable, bearing in mind that the failure to continue the negotiation process and reach agreement on this matter is due to obstruction by these two states. Bosnia and Herzegovina
GR6 (Government): should have organised the continuation of negotiations, but failed to do so since 2009, while Croatia was obstructing the process for eight years from 2002 until 2010. Regardless
GR6 (Government): of the motives of the two states to show that Annex C is not applicable in this matter, their efforts are futile. Simply reading of Annex C clearly shows that the old foreign
GR6 (Government): currency savings do indeed form part of succession issues dealt with by the Annex. Furthermore,
GR6 (Government): the Honourable Court has itself acknowledged this fact, for instance, in the decision on admissibility, in this case in paragraph 38. On the other hand, considering these issues
GR6 (Government): under Annex G would effectively lead to revision of the Succession Agreement. In conclusion,
GR6 (Government): it is undisputed that the issue at stake is an issue related to succession, and that the applicable international standards are embodied in the Vienna Convention on Succession. Consequently,
GR6 (Government): any issue regarding this matter can be settled in line with these rules and through political negotiations. That is not an issue which could be resolved in court proceedings and without
GR6 (Government): the consent of one side. The courts of other jurisdictions have decided so as well, as
GR6 (Government): shown in the observation of Serbia, and also supported by the decisions of the courts in the United States of America, submitted as Annexes VI and VII to the observations, as well as by the decision of the court in Cyprus, referred to in Annex I of 18 May.
GR6 (Government): In regard to succession issues, a submission from paragraph 16 of the Slovenian observation should be mentioned. Namely, though accepting that the old foreign currency savings belong
GR6 (Government): to the succession process, in this paragraph Slovenia seeks to place an entire burden on Serbia, claiming that foreign exchange reserves of the SFRY were misappropriated by Serbia and that they remain substantially undistributed, by which Slovenia clearly tries to show that they remain at the disposal of Serbia. This submission is entirely unfounded and not corroborated
GR6 (Government): with any evidence. Namely, besides the fact that the most of foreign currency was transferred
GR6 (Government): only pro forma, as explained in detail by the Respondent states in their observations and submitted documents, the foreign currency savings actually transferred to the National Bank of Yugoslavia automatically became a part of the foreign currency reserves of the SFRY. These reserves were governed by bodies in which all the constituent republics of
GR6 (Government): the SFRY had their representatives. Therefore, all the republics, later the successor states,
GR6 (Government): were fully aware of the assets of SFRY had. Thus, the claim of exclusive possession of
GR6 (Government): Serbia of the relevant documentation are devoid of any foundation.
GR6 (Government): Furthermore, the foreign currency reserves were divided by the succession agreement.
GR6 (Government): At the meeting of the committee in charge in Ljubljana in 2005, the authorized representatives of the successor states agreed on distribution of funds on the foreign currency accounts on the National Bank of Yugoslavia with foreign commercial banks. Moreover, the assets were
GR6 (Government): indeed divided, as clearly shown by the documents submitted by the Government of Serbia as Annex 2 of 18 May.
GR6 (Government): The Government of Serbia further submits that even if this Court decides to resolve the issue of the old foreign currency savings, the only reasonable solution would be to apply territorial principle. Firstly, because this is an internationally accepted standard in
GR6 (Government): doctrine and in practice in succession matters, for instance, Czechoslovakia and Soviet Union.
GR6 (Government): Secondly, because this is a principle explicitly accepted by the countries in question. Bosnia
GR6 (Government): and Herzegovina also internally recognize this principle, given that the Act on the Settlement of the Public Debt states the provision of funds shall be based on the location of each deposit bank or its affiliates or the lowest operating units. Croatia also initially
GR6 (Government): embraced this principle, accepting liability not only for the savings deposited in the banks which had seats in Croatia, but also enabling Croatian servers who had savings in banks that during the time of the SFRY did not have their seat in Croatia to receive payments in the same way as savers with Croatian banks. This was stated in Croatian observation,
GR6 (Government): paragraph 71.
GR6 (Government): Further Croatian contention in paragraph 87 of its observation is misleading. The principle
GR6 (Government): of territoriality is to be applied among the successor states as a principle governing succession, and therefore it is not relevant to the relations of the banks with its branch offices in the territory of other countries. Notwithstanding the subsequent removal of
GR6 (Government): Ljubljana Bank and Investbank from the scope of Bosnian legislation, the fact is that the all foreign currency savers of Investbank branch in Tuzla were entitled by the 1997 Act to use their savings in process of privatization. By this Act, Bosnian Herzegovina has effectively
GR6 (Government): acknowledged its liability for the contesting savings and created a reasonable expectation on the part of the savers that it would recover their savings. The unilateral Act by which
GR6 (Government): Bosnia later arbitrarily excluded Ljubljana Bank and Investbank from the scope of its liability cannot nullify this. Concerning the allegation of Bosnian Herzegovina
GR6 (Government): that by the 1998 Act Serbia recognized foreign currency savings as public debt regardless whether savings were deposited with the bank's seat or with its branch offices, it should be noted that the citizens with residence in former republics could have claimed their rights only under the condition of reciprocity. In any case, the 2002 Act, applicable at the
GR6 (Government): time of entering into force of the Convention in regard to Serbia, did not prescribe such possibility. The Court found in Molnar-Gabor and Kecman cases that limitations contained
GR6 (Government): in 2002 Act were legitimate. The second ground of the liability of the
GR6 (Government): Republic of Serbia in the Chamber judgment is the alleged fact that the most of funds of Investbanka Tuzla branch most likely ended up in Serbia. This allegation, however, is
GR6 (Government): not supported by objective facts. Even though the Tuzla branch of Investbanka was formerly
GR6 (Government): a part of the bank based in Belgrade, analysis of the statute shows clearly that it had significant independence from the bank. The level of independence is evident, among other, from the 1986 decision
GR6 (Government): on establishment of the universal business units, which was submitted to the Court as Annex 3 of 18 May. It is clear that universal business units had a decisive
GR6 (Government): role in the area of granting and taking loans and other related matters. Also, the relevant
GR6 (Government): articles of the statute submitted to the Court as Annex 5 of 18 May demonstrate that the branch offices were considerably independent. Most strikingly, Article 58 of
GR6 (Government): Investbanka statute provides that each business unit of Investbanka could place loans only up to the amount of deposits it collected. The basic banks were not allowed to grant
GR6 (Government): foreign currency loans or to keep the foreign currency on the accounts abroad, so they had to sell the foreign currency in exchange for DINAs, which were then given as loans. However,
GR6 (Government): due to inflation and devaluation of DINAR value, the sum of banks received in return from their debtors decreased dramatically. From 1981 to 1989, DINAR loans were devaluated
GR6 (Government): 3,800 times. Therefore, these loans represented a loss for the banks and a gain for the loan
GR6 (Government): beneficiaries. In the 2004 report of the Parliamentary Assembly of the Council of Europe, it was
GR6 (Government): concluded that the local banks provided loans to local commercial entities and individuals from the respective regions who were thus finally beneficiaries of these all-foreign currency deposits. The evidence of this was also submitted by other respondent states.
GR6 (Government): In conclusion, Serbia reiterates that the Honourable Court has no jurisdiction to decide on succession issues. Furthermore, the applications are not admissible in regard to Serbia for
GR6 (Government): the reasons elaborated in the observations. The fact that the seat of Investbanka was
GR6 (Government): in Serbia is irrelevant since Bosnian legislation created legitimate expectation of Mr. Šardanović
GR6 (Government): to recover his savings in Bosnia and Herzegovina. On the other hand, Serbian legislation at
GR6 (Government): the relevant time provided no grounds for such expectations. The responsibility of Serbia
GR6 (Government): should not be established just because certain legal provisions in the Act of another country arbitrarily excluded certain category of people from their right to demand their foreign currency savings. As shown above, final beneficiaries of the loans granted on the basis of the foreign
GR6 (Government): currency deposits with Invest Tuzla branch were local commercial entities and individuals.
GR6 (Government): Ultimately, these loans were a significant loss for the banks so it cannot be claimed that the money ended up in Serbia. Also, Serbia finds that there is not enough similarity
GR6 (Government): in respect of the position of all foreign currency savers to justify the application of pilot procedure as stated by the Court in paragraph 41 of the Jelicic case.
GR6 (Government): Finally, with regard to the just satisfaction claim, the Court should take into account the limitation concerning the payment of all currency savings prescribed by Serbian legislation.
GR6 (Government): These limitations were recognized as legitimate in the Court's case law, for instance, in Molnar-Gabor judgment. Thank you for your attention and we remain at the Court's disposal
GR6 (Government): for any additional observations and clarification. Thank you.
Dean Spielmann (JudgeP): Thank you, Mr. Carić. I call Ms. Annacker, please.
GR3 (Government): Mr. President, distinguished members,
GR3 (Government): this case is essentially an interstate case in which the lack of proof of the applicants' deposits has largely been ignored.
GR3 (Government): The applicants' deposits have never been verified, not even under Bosnian law.
GR3 (Government): And there is no evidence of any deposit in this case after 1991.
GR3 (Government): So not even the applicants' council has been able to vouch for these deposits.
GR3 (Government): In the absence of proof, the applications must be dismissed.
GR3 (Government): They cannot be used as a vehicle to resolve an interstate dispute.
GR3 (Government): I quote from the Chamber Judgment, paragraph 7, it would appear that the applicants had certain balances in their accounts at an unspecified date.
GR3 (Government): Appearance is not enough.
GR3 (Government): This case is fundamentally a succession case.
GR3 (Government): The evidence shows when Yugoslavia dissolved, the SFOI was in financial disarray, the Yugoslav banks in crisis, all foreign currency deposits were frozen by the SFOI in response to massive withdrawals.
GR3 (Government): The banks had deposited $12 billion in foreign currency with the National Bank of Yugoslavia.
GR3 (Government): 75% of the basic bank's assets consisted of claims against the NBY.
GR3 (Government): I refer the court, for example, to Croatia's enclosure, number 3, pages 6 and 8.
GR3 (Government): The NBY defaulted on this debt.
GR3 (Government): Having lost their main debtor after the SFOI ceased to exist, the Yugoslav banks, including Lubyanka Banka, were not in a position to repay the foreign currency deposits.
GR3 (Government): The NBY is a state organ, so its assets and debts are subject to division among the successor states pursuant to rules of state succession.
GR3 (Government): The SFOI, however, claimed to be the sole successor entitled to all NBY assets, a substantial portion of which was used.
GR3 (Government): So the successor states, therefore, did not assume the NBY's debt towards the banks.
GR3 (Government): They assumed instead direct responsibility for foreign currency deposits.
GR3 (Government): And as Judge Reis explained in his concurring opinion in Kovacic versus Slovenia, it is precisely for this reason that this case is essentially a succession case.
GR3 (Government): This case is not about state interference with private law claims against banks.
GR3 (Government): And it is not about the liability of a respondent state for the debts of a state-owned bank.
GR3 (Government): Gracious and Bosnia's denial that this case is a succession case is belied, for example, by their participation in four rounds of negotiations to distribute the debt that issue mediated by the Bank for International Settlements and accede to the agreement on succession issues, a memorandum of understanding executed between Slovenia and Croatia on March 11, 2013, and a joint letter of Slovenia and Croatia to the Bank for International Settlements that was executed last Friday.
GR3 (Government): The Republic of Slovenia submits that in the absence of a negotiated solution, liability for foreign currency deposits should be divided pursuant to the territorial or final beneficiary principle, the primary criterion to distribute a predecessor state's debt under rules of state succession.
GR3 (Government): I would point out that that principle has also been accepted as equitable by the World Bank, by the London Club, and by the Paris Club in allocating the SFRY's external debt.
GR3 (Government): And it was also applied by Bosnia in dividing the debt that issue here, liability for foreign currency deposits among its constituent entities.
GR3 (Government): This liability was incurred by the SFRY and its MBY vis-a-vis particular banks in a particular region, in this case, Bosnia and Herzegovina.
GR3 (Government): For the benefit of a particular republic, again, Bosnia.
GR3 (Government): In exchange for the foreign currency that the basic bank Sarajevo deposited with the MBY, it received low-cost DINA loans.
GR3 (Government): And the bank used these subsidized DINA loans to finance investments in Bosnia.
GR3 (Government): There is not even a shred of evidence to support the allegation that the Associated Bank in Ljubljana, rather than the basic banks in Zagreb or Sarajevo, would have received these DINA loans and invested them in Slovenia.
GR3 (Government): This allegation is plainly false.
GR3 (Government): I draw the Court's attention to Slovenia's Chamber Annex 289, paragraph 9, to the basic bank Sarajevo's contracts concluded in accordance with the legislation Slovenia's Annexes 4 and 5, and Deloitte's expert report, Slovenia's Annex 123, page 4.
GR3 (Government): A document submitted by Bosnia, which is translated in Slovenia's Annex 117, shows every single large loan made by the basic bank Sarajevo was extended to companies in Bosnia.
GR3 (Government): And by contrast, the loans that were extended to Slovenian companies were all exclusively funded by the 14 basic banks in Slovenia.
GR3 (Government): I submit that on these facts, division of liability for old foreign currency deposits pursuant to the head office principle or nationality of the banks would be wholly inequitable.
GR3 (Government): Now, this brings me to a key issue in these proceedings.
GR3 (Government): What actually happened with the old foreign currency deposits received by the banks, and who ultimately benefited from them?
GR3 (Government): Now, as in any banking system, the answer is simple.
GR3 (Government): The bank that receives the deposits uses them.
GR3 (Government): And I'd like to draw the court's attention to a 1992 study precisely on the subject of the use of old foreign currency deposits, Grazier's enclosure 3.
GR3 (Government): And that enclosure describes on page 16 how the basic banks used foreign currency deposits.
GR3 (Government): According to the study, they deposited most of them with the NBY.
GR3 (Government): They used inflows of foreign currency deposits to repay their depositors.
GR3 (Government): And they used them to pay for certain imports and, quote, goods for vital necessities of the republic in which the bank was based.
GR3 (Government): Again, there is not a shred of evidence that the foreign currency cash shipped by the bank in Sarajevo was misappropriated in Slovenia.
GR3 (Government): These are gross misrepresentations.
GR3 (Government): Grazier and Bosnia would infer misappropriation from the fact that the associated bank shipped cash for the Sarajevo basic bank using cash transportation and board services of the National Bank of Slovenia.
GR3 (Government): This inference is no stronger than an inference that DHL misappropriated goods that it transported to its distribution center.
GR3 (Government): The evidence shows that the Sarajevo basic bank shipped foreign currency cash to NBY accounts abroad.
GR3 (Government): And as of mid-October 1988, to the bank's own accounts abroad.
GR3 (Government): The relevant NBY resolution, Slovenia's Annex 9, paragraph 2, and chamber Annex 289, paragraph 8, required the banks to deposit foreign currency cash from deposits of Yugoslav citizens, quote, in the accounts of the national bank managed by foreign banks, close quote.
GR3 (Government): And I would emphasize after 1978.
GR3 (Government): So when the cash shipments at issue occur, it was all net inflows of foreign currency deposits that were shipped, physically shipped, to NBY accounts abroad.
GR3 (Government): The accounting method or performer method in this period only applied to interest, as is explained in clear terms, for example, in a 1988 memorandum authored by the National Bank of Yugoslavia, which is Slovenia's Annex 10, pages 13 and 18.
GR3 (Government): With respect to other foreign currency cash received by the basic bank Sarajevo, for example, tourism or Yugoslav experts, most of that cash was sold to the NBY.
GR3 (Government): And pursuant to an NBY degree, Slovenia's Chamber Annex 383, and implementing NBY instructions, Slovenia's Chamber Annex 291, paragraph 2, such foreign currency cash also had to be dispatched to NBY accounts abroad.
GR3 (Government): Slovenia has submitted cash transportation records in Annexes 14 and 15.