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IFC Launches Mediation Center for Small and Medium Enterprises in Serbia and Montenegro


In Washington:
Georg Schmidt

Phone: +1 (202) 458-2934

Fax:      +1 (202) 974-4384

Email:
Gschmidt@ifc.org

In Sarajevo:

Sanjin Arifagic

Phone: +(387)-33 251 555

Email:  
sarifagic@ifc.org


December 10, 2004, Belgrade—Southeast Europe Enterprise Development (SEED), a multi-donor initiative managed by the World Bank Group’s private sector arm, the International Finance Corporation, has launched a center for mediation in Belgrade. The center will offer small and medium enterprises (SMEs) in Serbia and Montenegro an alternative to business-hindering litigation. It is part of IFC’s wider effort to introduce mediation through legislation, capacity building, and awareness campaigns.

As part of SEED’s Alternative Dispute Resolution program in southeast Europe, the center helps SMEs bypass expensive and lengthy court procedures and gain faster access to capital. This allows companies to focus on their core business and improve their overall performance.


“Our key objective is to bring mediation closer to small and medium enterprises since they suffer most from lengthy court disputes that tie up working capital,” stated Biserka JevtimijeviŠ-DrinjakoviŠ, SEED’s project manager in Serbia.


SEED has also provided advisory support for drafting the country’s law on mediation. Adoption and enforcement of the law was recommended by the European Commission to better align Serbia and Montenegro’s legal system with European Union practices.


“I strongly support the law on mediation. Once adopted, it will have a catalytic effect on our SME sector,” said Gordana Pualic, Serbia's deputy minister of Justice at the launch of the mediation center.


The Belgrade mediation center is the second of its kind in the region. A center launched earlier this year in Bosnia and Herzegovina has already demonstrated clear benefits for SMEs. 77 disputes were resolved in less than six months, releasing approximately 1.5 million Euros of assets from further litigation, with over thirty mediations being scheduled in December. On average, the mediation procedures took less than two hours, while some of these disputes had been in the courts for over three years.

In Serbia, over 20 judges from municipal and district courts in Belgrade and other major cities have completed SEED’s mediation training. Only a week after SEED and the Second Municipal Court in Belgrade entered into partnership, five commercial cases were mediated successfully, releasing a total of 105,000 Euros’ worth of assets. For example, a 10 year old indemnity case involving Yugoslav Airlines was resolved in two hours.


Southeast Europe Enterprise Development (SEED;
www.ifc.org/seed) is a five-year, multidonor initiative managed by IFC to strengthen small and medium enterprises in Albania, Bosnia and Herzegovina, FYR Macedonia, Kosovo, and Serbia and Montenegro. Since its inception in 2000, SEED has focused on increasing competitiveness of SMEs in the region, improving their business environment, and strengthening markets for business development.


The mission of IFC (
www.ifc.org) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.