The initiation of Sveti Stefan— a partial settlement between the government and the tenant, alongside a temporary halt to arbitration proceedings— forms a part of the agreement initiated by the Greek businessman Petros Statis’s company, “Adriatic Properties.”

Various sources have informed “Vijesti” that Statis and his partner companies have signed a confidential agreement sent to the Government. Additionally, Novak Djokovic, the most successful tennis player in the history of the sport, is reportedly looking to invest in the firms that have leased the Montenegrin landmark for the past thirty years.

Inquiries by “Vijesti” to Prime Minister Milojko Spajić’s office and the Ministry of Economic Development regarding the approval status of the agreement went unanswered. They did not clarify what the “problem” might be or disclose any details.

As per multiple sources cited by “Vijesti,” if the document is signed, the government entities and Statis’s partner companies must jointly request the London tribunal to pause the arbitration for at least six months within a day. During this period, the parties are expected to negotiate a final settlement.

Reportedly, Statis’ company is committed not to transfer the lease of the resort to another entity without the Government’s consent.

“Sveti Stefan – Miločer” hotel complex is leased by Adriatic Properties, along with its partners “Aidway Investments Limited” and “Amanresorts.”

The resort has been closed since 2021, and the Government initiated arbitration proceedings against the three companies involved before an international tribunal in London.

It is anticipated that the Government will approve the agreement, instructing the majority state-owned entities “Sveti Stefan Hotels,” HTP “Miločer,” and HG “Budvanska Rivijera,” as well as the Ministry of Economic Development, to formally execute it.

According to “Vijesti,” both the Municipality of Budva and the Public Company for Coastal Zone Management are set to sign the agreement, while consent from the local community is reportedly not required.

Must be open for at least eight months

The agreement’s signing would unlock Sveti Stefan after four years, though a critical hearing in London is scheduled for mid-May. Legal advisors on both sides are already seeking clarifications, and “Vijesti” received unofficial hints that court-related fees, including those for judges and legal representatives, are due imminently.

Upon the agreement’s signing, Statis’ company is expected to ensure the Sveti Stefan city hotel and the Miločer villa remain operational for a minimum of eight months each year. This year, however, they anticipate being open for five months.

“Vijesti” was informed that the agreement mandates the Villa “Miločer,” the SPA center “Aman” in Miločer Park, and the restaurant “Olive” adjacent to the city-hotel to be operational within 45 days post-signing.

The document is said to specify that the eastern and western beaches of Sveti Stefan, alongside the Great Miločer Beach (King’s Beach) before the Villa “Miločer,” will be accessible within 75 days after signing. The city-hotel “Sveti Stefan” should be operational no later than 105 days following the agreement’s execution.

The gate on Kraljičina, and the pathway to the Saint

The agreement has not conclusively resolved the usage of Queen’s Beach, deemed one of Montenegro’s most beautiful beaches, as reported by “Vijesti.”

The dispute over beach access contributed to the closure of Sveti Stefan, highlighted by locals tearing down the gate in summer 2021, demanding public access.

A temporary resolution is said to be in the works, similar to that of the summer prior, effective until a final decision is reached. The global hotel operator “Aman” insists that only complex guests should access Queen’s Beach and part of Miločer Park, viewing this as vital for client discretion.

The agreement reportedly empowers Adriatic Properties and Aman to install fences at both ends of the pedestrian path, restricting Queen’s Beach and the adjacent path solely to the complex’s guests. These privileges would be in effect daily from 8 a.m. to 9 p.m., allowing public access outside those hours.

Statis’ company is also permitted to put a gate on the pedestrian bridge leading to the city-hotel, limiting access to hotel guests. Organized tourist tours may visit Sveti Stefan bi-daily.

Moreover, the agreement allows local residents to hold religious ceremonies in the churches situated on Sveti Stefan.

A temporary use regime appears to be critical to the agreement, with all parties committed to upholding it. Kraljeva and the eastern and western Sveti Stefan beaches will adhere to the hotel bathing rules persistent in previous years, with mandatory beach furniture usage, which previously came at exorbitant costs.

Djokovic invests

In early February, Novak Djokovic took steps to resolve the lock on the Sveti Stefan city hotel. Post-discussion with Prime Minister Spajić, Djokovic stated that this was his primary reason for being in Montenegro, promising to leverage his name and influence for a resolution. As the global ambassador for Aman, he noted that they had undertaken “initial conversations” and were briefed “on all matters,” emphasizing his commitment to working for Montenegro’s “general interest” and hoping for an impending resolution.

Djokovic’s interest in investing in the leased companies of Sveti Stefan – Miločer was presented during a recent meeting convened by Spajić with representatives from all parties, excluding the lessor, and confirmed by multiple sources to “Vijesti.”

It appears Djokovic is poised to invest in additional projects within Montenegro.

For four summers, Adriatic Properties has kept the Sveti Stefan city-hotel and the Miločer villa closed, halting construction on the new Kraljičina plaža hotel after arbitration proceedings began. The absence of an agreement regarding Kraljičina plaža and the path between the beach and the Miločer park spa center led Aman to withhold opening Sveti Stefan.

Saint celebrates 65th birthday

This summer marks the 65th anniversary of the beloved “Saint,” which transformed from a small fishing village and medieval fortress—resisting invaders for centuries— into a fashionable summer destination, thanks to a decision made by the then-communist authorities.

Last season saw escalating dissatisfaction among locals due to the ongoing closure of the Sveti Stefan city-hotel, leading them to propose drastic actions like blocking the roundabout at Budva’s entrance, which they abandoned upon receiving government assurances the city-hotel would open, a promise not fulfilled.

The closure of the city-hotel in 2021 also stemmed from issues surrounding Queen’s Beach, which had long been exclusive to hotel guests and political elites. Locals breached the fence during a summer incident, prompting the Public Company for Coastal Zone Management to mandate its removal, thereby reopening paths in Miločer Park.

Following this event in the summer of 2021, Adriatic Properties sought state guarantees to prevent recurrence, which were denied. In response, the state initiated arbitration proceedings in London, alleging contract breaches, leading Adriatic Properties to counterclaim for damages amounting to one hundred million euros.

Budva versus “private interests”

Speculation surrounds potential private interests in the lease of the city-hotel “Sveti Stefan” and the Villa “Miločer.” It is alleged that the lessee has been forced to negotiate with local firms over the years to address the concerns of individuals prominent in protests.

Budva Municipality’s mayor, Nikola Jovanović, was the first to highlight these private interests during a recent protest by the local community “Sveti Stefan” in front of the local government. He emphasized that the local authority prioritizes public welfare over certain private interests that have emerged in recent years.

Installments deposited into the accounts of state-owned companies

The agreement also aims to address the financial crises of major state-owned entities “Sveti Stefan Hotels” (which owns the city hotel “Sveti Stefan” and Villa “Miločer”) and HTP Miločer (the owner of the former hotel “Kraljičina plaža” and parts of Miločer Park, where new hotel annexes with 66 apartments are under construction).

Following the initiation of arbitration proceedings, Statis’ company has neglected rent payments for the past two years—amounting to 87 thousand euros quarterly for HTP “Miločer,” and 380,000 euros quarterly for “Sveti Stefan Hotels.”

Both companies are in significant debt and have encountered severe challenges.

The agreement reportedly requires “Adriatic Properties” to remit six quarterly installments to both companies—four for 2023 and two for 2024.

However, it is claimed that “Sveti Stefan Hotels” is contesting the total due to the final judgment. The Commercial Court upheld the Arbitration Court’s ruling in London, ordering “Sveti Stefan Hotels” and the Government to compensate “Adriatic Properties” 522 thousand pounds (approximately 620 thousand euros) for arbitration costs…

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