The Commercial Court has upheld a payment order mandating the state-owned company “Crnogorska Plovidba” to reimburse the state for a debt related to a loan installment paid to the Chinese Exim Bank, totaling approximately 2.2 million euros, alongside default interest and procedural expenses.

The ruling from March 24 of this year, which “Vijesti” has obtained, indicates that “Crnogorska Plovidba”‘s principal debt to the state amounts to 2,231,953.47 euros, which includes obligations owed to the Chinese Export-Import (Exim) Bank, the Central Bank of Montenegro’s fees, and currency conversion costs. Procedural costs are stated to be 2,700 euros, with interest amounts unspecified, accruing from January 29, 2021, until the total payment is made.

The court’s ruling confirms that the payment order issued on November 30, 2021, remains in effect entirely and dismisses the defendant’s objection as without merit. The defendant is required to repay the plaintiff for procedural costs totaling 2,700 euros within eight days following the finalization of the judgment.

The Ministry of Finance initiated legal action against “Crnogorska Plovidba” concerning debts from loan installments for the purchase of two vessels, “Kotor” and “21. maj.” These payments were made on behalf of the company to the Chinese Exim Bank in 2021. Following the plaintiff’s request, the Commercial Court issued the relevant payment order on November 30, 2021, instructing “Crnogorska Plovidba” to pay 2,231,953 euros in statutory interest and procedural fees; the company subsequently objected to this ruling.

A loan agreement for approximately $47.4 million with Exim Bank was established in January 2010, secured by a state guarantee. The loan has a 15-year repayment period, with a fixed interest rate of three percent per annum and a five-year grace period.

Due to “Crnogorska Plovidba” failing to meet its installment obligations, the state has provided assistance multiple times. In the latter half of 2022, the Agency for the Protection of Competition (AZK) determined that “Crnogorska Plovidba” was one of several government-owned firms receiving uncoordinated state aid, requiring the return of improperly received funds to the state. Earlier this year, the Ministry of Maritime Affairs reported that “Crnogorska Plovidba” owed the state over 34 million euros.

“Potential Ship Blockades and Repercussions”

In December 2020, the Chinese bank requested a loan installment payment of 2,696,832 euros from “Crnogorska Plovidba,” due by January 21, 2021, which the company was unable to pay, leading to the state budget covering the debt as per the Ministry of Finance’s decision. On March 2, 2021, the Ministry authorized a payment of 2,219,249 euros against the debt guaranteed to Exim Bank, alongside a compensation of 4,438 euros to the Central Bank of Montenegro and 8,265 euros for currency conversion.

In challenging the Commercial Court’s decision to issue a payment order, “Crnogorska Plovidba” contended that the plaintiff failed to provide prior notification to the defendant to fulfill the payment obligation before pursuing legal action, nor did it provide documentation detailing the basis of the requested payment.

The Commercial Court’s ruling notes that “Crnogorska Plovidba” argued that the company is state-owned and that the Ministry should have recognized that enforcing the payment order and the consequent forced collection could inflict irreparable harm on the state. They indicated this could jeopardize the ships “Kotor” and “21. maj,” valued at over 40 million dollars, being blocked in international ports. This situation, they argued, could endanger the lives of over 60 Montenegrin citizens comprising the crew, essentially reverting them to a situation reminiscent of the 1990s, during which all Montenegrin fleet ships were stranded and sold off due to unpaid obligations.

“Crnogorska Plovidba” requested that the plaintiff withdraw the lawsuit and that the court nullify the payment order, without seeking reimbursement for procedural costs.

The Ministry of Finance, represented by the Protector of the State’s Property and Legal Interests Bojana Cirovic, advocated for the court to uphold the payment order during hearings.

Liabilities and Default Interest

The judgment highlighted that Article 1116 of the Law on Obligations allows a guarantor who has settled a creditor’s claim to seek reimbursement from the debtor for all payments made on their behalf and any accrued interest from the payment date.

The Commercial Court determined that considering the stipulation in the Law and the fact that the plaintiff paid the lender’s account under a letter of guarantee due to the defendant’s failure to meet their contractual obligations, “the defendant is mandated to pay the amount requested, along with statutory default interest,” rendering the defendant’s objection to the payment order baseless.

While making its determination, the court acknowledged the defendant’s claims regarding its majority state ownership and the potential damage to the state from the payment order’s implementation, but concluded that, based on the available evidence, these assertions did not warrant an alternate verdict.

In evaluating the defendant’s claims regarding the lack of prior notice or evidence concerning the payment documentation, the court found these did not significantly impact the decision. According to the court’s ruling, the plaintiff is also entitled to compensation for procedural costs amounting to 2,700 euros, related to representation costs for two hearings held on December 24, 2024, and February 20, 2025 (1,350 euros each),” the verdict states.

In a report late last year, “Vijesti” noted that the Government plans to consolidate two state-owned shipping entities—“Barska Plovidba,” where it holds 53 percent of the shares, and “Crnogorska Plovidba,” the entirety of which is state-owned—into a single entity, either through a traditional merger or by filing for bankruptcy for “Crnogorska” and pooling its vessels with “Barska” via a recapitalization process.

The Ministry of Maritime Affairs, headed by Filip Radulović, has commissioned an economic and financial assessment of the current state of shipping companies. Radulović indicated in mid-August of last year that he anticipates completion of the Faculty of Economics’ analysis within the next four to six weeks, after which they will review all proposed options and inform the relevant companies and the public regarding any forthcoming actions and specific steps to be taken.

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