Changes to the Civil Procedure Code – Solution for NPL Market in Serbia
The Law Amending the Civil Procedure Code (“RS Official Gazette” 87/18 of 13 November 2018) entered into force on 21 November 2018.
The amendments concern Article 204 of the Civil Procedure Code (“RS Official Gazette”, Nos. 72/2011, 49/2013 – Constitutional Court Decision, 74/2013 – Constitutional Court Decision and 55/2014), which provides for alienation of disputed asset or right in a pending litigation and allows the acquirer of such asset or right to enter the litigation.
Prior to the amendments, Art 204 of the Civil Procedure Code comprised three paragraphs, as follows:
“If a party alienates the asset or right which is the subject of pending litigation, this shall not preclude the litigation from being completed between the same parties. (Paragraph 1)
The person who acquired the asset or right which is the subject of pending litigation may enter the proceedings instead of the plaintiff or the defendant only subject to the consent of both parties. (Paragraph 2)
In cases referred to under Paragraph 1 hereof, the ruling shall also produce effect on the acquirer”. (Paragraph 3)
A legal transaction whereby an asset or right in dispute has been alienated normally leads to the termination of legal standing. However, in order to protect the interests of the opposing party, the Code set down that the change in the legal standing that had occurred in the course of the litigation shall not preclude the litigation from being completed between the same parties. Thus, the rule requiring the Court to dismiss a case due to the lack of legal standing, had been waived.