BOSNIA & HERZEGOVINA Trends and Developments Contributed by: Igor Petković and Branko Marić, Marić & Co.
Potential For Implementing Modern ADR Solutions Into An Obsolete Arbitration Setting – The Case Study Of Arb-Med-Arb It is as difficult to define law as it is to draft legislation that keeps pace with constant societal change. Arbi - tration in Bosnia and Herzegovina is no exception. For many years, its legal framework has remained largely unchanged, offering limited solutions to the challenges of modern alternative dispute resolution (ADR). This is primarily due to the limited use of arbitration, as com - mercial disputes are still resolved almost exclusively before the state courts. This has created something of a “chicken-and-egg” problem. The lack of practice discourages legislative innovation, while an outdated legislative framework provides little incentive for par - ties to choose arbitration. Breaking this cycle requires bold and progressive reform. Bosnia and Herzegovina should therefore look beyond traditional arbitration models and consider modern ADR mechanisms that could strengthen both its dispute resolution frame - work and its position as a regional ADR venue. As arbitration continues to gain importance, national legislation must evolve accordingly. Legal systems cannot remain static in a rapidly changing commer - cial environment and must continuously adapt to new circumstances and emerging challenges. This is particularly true in arbitration, where developments in international commerce, technology and cross-bor - der investment continue to reshape how commercial disputes are resolved. Legislators should therefore regularly review and update arbitration legislation to ensure that it remains effective, relevant and capable of meeting the expectations of arbitration users. Fail - ure to do so risks creating a legal framework that no longer reflects contemporary arbitration practice or adequately addresses the needs of commercial par - ties. This is precisely the role of lex arbitri . It establishes the legal framework governing arbitration and defines the relationship between arbitration and the courts of the seat. Bosnia and Herzegovina does not have a standalone arbitration statute. Instead, arbitration is regulated through separate chapters of the entity-lev - el civil procedure legislation. As a result, the country has long been awaiting a comprehensive legislative overhaul in this area. The scope and direction of such
reform raise broader questions that fall beyond the scope of this article. Rather than discussing arbitra - tion reform in general, this article argues that simply modernising the existing legislative framework may not be sufficient. As arbitration reform increasingly becomes a topic of discussion, Bosnia and Herzegovina should look beyond traditional forms of ADR and consider more innovative mechanisms to attract international users. One such mechanism is Arb-Med-Arb (AMA), which is briefly examined in this article. The discussion is not merely academic. As Bosnia and Herzegovina continues to attract cross-border investment, particularly in sectors such as energy, infrastructure and finance, efficient and internation - ally recognised dispute resolution mechanisms are becoming increasingly important. Any future reform of the country’s arbitration framework will therefore be of practical significance not only for domestic users, but also for foreign investors and commercial parties doing business in the jurisdiction. Bosnia and Herzegovina continues to experience a considerable judicial workload, which is not evenly distributed among its courts. Those located in larger, economically active urban centres continue to bear the greatest burden. Governmental and internation - al organisations have made considerable efforts to encourage court settlements and other forms of ami - cable dispute resolution. Nevertheless, ADR remains underdeveloped in practice and even basic mecha - nisms such as mediation have yet to gain significant commercial acceptance. Arb-Med-Arb is an abbreviation for Arbitration-Medi - ation-Arbitration, a hybrid dispute resolution mecha - nism combining the two most widely recognised forms of ADR. To understand the advantages of Arb-Med- Arb, it is necessary first to examine the relationship between these two mechanisms. Basics of the correlation between mediation and arbitration At its core, mediation is an assisted negotiation; it is facilitated by a neutral third party who remains impar - tial both in conducting the process and in relation to
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