The Ulcinj Saltworks land is undeniably state-owned, a fact confirmed by the Privatization Council, which stated that no market compensation was paid for the real estate tied to that entity.

The legal guardian of Montenegro’s property and legal interests, Bojana Cirovic, highlighted this to “Vijesti”.

“This position has been reaffirmed by the Supreme Court, indicating that the legal criteria confirming its status as state property have been satisfied, as specified in provision 419 of the Law on Property and Legal Relations. The procedure was not reinstated to convert ownership because that step has already been processed legally. It was sent back for a new review to address irregularities in the cadastre registration. The administrative procedure referred to by the court is indeed the one currently underway,” Ćirović stated to “Vijesti” regarding the Administrative Court’s recent verdict to overturn the Ministry of Finance’s decision from June 15, 2022.

The ruling also revoked the state’s registration as the titleholder for 15 million square meters of land, asserting that the state should have “initiated civil proceedings regarding ownership rights over real estate” before making ownership determinations.

Ćirović remarked that this process aligns with the Privatization Council’s viewpoint that market compensation was not settled, which means the land is not owned by the Saltworks but remains under state ownership.

“The process for giving the Council’s opinion is distinct and has concluded. Now, the procedure for amendments in the cadastre is a separate matter. The critical point is the Council’s negative opinion, while the cadastre procedure depends on proper regulatory enforcement,” said Ćirović.

The bankruptcy administration cannot initiate the sale of assets.

When asked if the bankruptcy administration might re-announce the auction for the sale of Solana’s assets following the ruling, she deemed this unlikely.

“To list something for sale, the property must first be included in the B list of real estate, which Solana does not possess and cannot possess, since the Council’s opinion that no market fee was paid is final, indicating there is no property in favor of Solana. Thus, the Administrative Court has not reinstated Solana’s status with Eurofond, contrary to recent claims, and this is not feasible,” Ćirović asserted.

However, shareholders of the Saltworks, with Eurofond as the largest stakeholder, contend that the Administrative Court’s ruling overturned the unlawful registration of “Bajo Sekulić” Saltworks’ land as state property.

“The court determined that Solana was never state property but rather belonged to a joint-stock company, whose shares are publicly traded. The previous government’s decision to register a private company’s asset as state property, without a court ruling, compensation, or legal basis, has now been legally contested and overturned,” stated the shareholders of Solana “Bajo Sekulić” after the Administrative Court’s ruling.

The shareholders stressed the importance of the Administrative Court’s decision, which “restored the status quo on the right of use,” asserting that competent authorities must now fulfill their legal duty and transition the right of use into ownership, similar to numerous other cases, in line with existing laws.

“Otherwise, Montenegro risks facing serious legal and financial repercussions. Public statements suggest potential lawsuits exceeding 200 million euros, which, if not addressed lawfully, could arise in domestic and international courts, including the European Court of Human Rights in Strasbourg,” warned the shareholders.

If the proposition that the land did not belong to Solana were accepted, it would imply that state institutions involved in the privatization and shares trading essentially issued shares without any asset backing.

The Privatization Council, chaired by former Prime Minister Zdravko Krivokapić, issued an opinion in 2021 stating that market compensation for Solana’s shares was unpaid, and that the company’s shareholders, including Eurofond, lacked ownership rights over the land in Ulcinjsko Polje, despite their prior usage rights.

The Council declared that the state is the “undisputed” owner of the Solana land, valued at 157 million euros.

Consequently, the cadastre registered Montenegro as the owner of Solana property in 2022.

Reasoning of the Administrative Court

In its judgment reasoning, the court emphasized that for ownership rights conversion to be legally valid, certain criteria must be satisfied: the existence of rights to manage, utilize, or permanently use and dispose of state-owned land, the land’s suitability for ownership rights, that no special laws prohibit this conversion, or that the interested party demonstrates prior ownership rights as defined before the ZOSPO took effect, and the market price for land must be paid only if rights were acquired during the privatization or bankruptcy process.

Moreover, it noted, “in this case, the transformation cannot be carried out in accordance with paragraph 2 of Article 419 of the ZOSPO. This provision supports situations where market compensation was not paid in the privatization or bankruptcy process, wherein the land ‘remains’ state property.”

“However, as Articles 419 and 420 of the ZOSPO need to be interpreted collectively, and Article 420 specifies the requestor for the ownership rights registration, the court does not view this as a transformation. Consequently, the court concludes that the challenged initial decision results from a misapplication of substantive law and that the claims of the plaintiffs should have been accepted and the contested decision annulled,” the reasoning indicates.

The Administrative Court ultimately urged the state of Montenegro to ensure that all parties could take part in the retrial and comment on the findings of the investigation.

The future of the Ulcinj Saltworks is vital for successfully closing the environmental chapter in negotiations between Montenegro and the European Union.

This is a critical requirement for closing Chapter 27 and moving toward EU membership.

This necessitates a clear status of ownership and management of the land, which was designated as a nature park in 2019 and added to the Ramsar list of internationally significant wetlands.

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