1

Following article, under the name HISTORY OF AD HOC ARBITRATION

IN REPUBLIC OF CROATIA, originally written in Croatian Language,
is submitted, and approved for publication by editor in chief of
“Pro Bono-Legal Journal of the Law Clinic of the Faculty of Law,
University of Zagreb. Article is chosen for next number edition
which should be issued in the end of this month.
(https://www.pravo.unizg.hr/oldwww2018/izdavacka_djelatnost/ca
sopisi_pravnog_fakulteta/pro_bono)
Unfortunately, until the deadline for submitting Ph.D
candidature, relevant still was not published.

HISTORY OF AD HOC ARBITRATION IN REPUBLIC OF CROATIA

By looking back at the events, historical circumstances,

social events, and the psychology behind the creation of the ad

hoc arbitration institute itself, an attempt will be made to

present the social reality, law in the material sense, which

shaped arbitration as we know it today. Special emphasis in this

chapter is placed on the development of arbitration within the

area that today includes the Republic of Croatia and on the

changes in the legal arrangement of arbitration law from the

existence of Yugoslavia until the Arbitration Act, 2001.

Some theorists dealing with the history of law believe that

arbitration was used as a mean of resolving disputes before the

advent of the court system, and point to the records of the

ancient Egyptians, Greeks and Romans to support this claim.1

1 A brief history of commercial arbitration, available at:

https://dynalex.wordpress.com/2012/12/28/a-brief-history-of-commercial-
arbitration/, (accessed: 1/4/2022)
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Legal-historical sources 2, looking back on the topic of the very

historical beginnings of arbitration, agree that long before

they

established laws, organized courts or principles of law, people

resorted to arbitration as a means of resolving conflicts and

disputes and reconciling differences. 3In Athens, for example,

there were two types of arbitrators, public and private. The

public arbitrator, who had to be at least fifteen years old, was

chosen by lot before the magistrate every year.4

On the other hand, it seems that the private arbitrators

were more similar in character to the arbitrators of later times.

They would be elected by the parties themselves and their powers

were limited by the agreement of the parties that elected them.

5The arbitrators took an oath that they would decide the case

and the question completely impartially. At the same time, the

parties committed themselves that once the case has been decided

2Aristotle appealed to the benefits of conciliation, while in Heraldus'

Animadversiones as noted by Wolaver there is an account of the judgment
conciliation that existed among the Greeks. Also common is the use of
arbitration as a means of resolving disputes in the medieval Roman Empire
from the 17th century.
Inetimi, Mac-Barango, The Role of Arbitration Clauses in Resolving Disputes
in Carriage of Goods Across International Borders, Journal of Law, ISSN
2224-3259, Vol.83, Niger, 2019 . available at:
https://iiste.org/Journals/index.php/JLPG/article/download/47143/48672, p.
18.
3Emerson, Frank D., History of Arbitration Practice and Law, 19 Clev. St.

L. Rev. 155, Cleveland, 1970, p. 155

4
Jones, Sabra A., Historical Development of Commercial Arbitration in the
United States, Minnesota Law Review 2296, Minnesota, 1928, p. 242.
5 Ibid.
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through arbitration, they will not submit it to the state court

for re-determination.6

It is also recorded that Philip II. Macedon, the father of

Alexander the Great, used arbitration to settle territorial

disputes arising from a peace treaty with some of the Greek

states as early as 337 BC.7

Furthermore, even before the arrival of Europeans on the

American continent, Native American tribes are believed to have

used arbitration procedures to resolve disputes that arose

within the tribe, as well as those that arose with other tribes. 8

The first US president, George Washington, included an

arbitration clause in his will authorizing a panel of three

arbitrators to make a final and binding decision to settle any

dispute that might arise over the interpretation of the wording. 9

English trade guilds 10, which can be compared to today's

modern chambers of commerce, and craft guilds, which were similar

to modern trade associations, were organizations whose purpose,

6Ibid.
7 A brief history of commercial arbitration, available at:
https://dynalex.wordpress.com/2012/12/28/a-brief-history-of-commercial-
arbitration/, (accessed: 5/4/2022)
8 I am going to. (accessed: 5/4/2022)
9Arbitration clause in The Will of George Washington (Transcription), 1799,

available at: https://www.trans-lex.org/800900/_/arbitration-clause-in-the-

will-of-george-washington- 1799/, ( accessed: 4/5/2022)
10Association of traders founded to provide mutual assistance and

protection, ensure the quality and price of goods, eliminate mutual

competition and disable foreign competition. Merchant guilds were
particularly powerful from the 10th to the 15th centuries. century, when
they played a major role in the life of the cities of Germany, England
(London), France (Paris, Rouen) and Italy (Genoa, Florence), available at:
https://www.enciklopedija.hr/natuknica.aspx?ID= 21991, ( accessed:
4/5/2022)
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among others, was to conduct mutual arbitration. Guild members,

before taking action in state court, had to take their cases to

the guild court to attempt an arbitration award.11

On the basis of these apparently sporadic examples

throughout history, it can be concluded that arbitration, at

least in its relatively undeveloped form, was represented

throughout all historical eras in the culture of almost all

nations.

Ever since there was a conflict and the desire for its

peaceful resolution, there has also been ad hoc arbitration,

although without developed rules of procedure, substantive legal

rules and regulations on forced enforcement and other things

that we associate with ad hoc arbitration today, the first forms

have the same substance and goal, peaceful settlement of disputes

before an elected judge, bypassing state authorities.12

Development of international private arbitration in the Republic

of Croatia

In the Provisional Civil Procedure Act for Hungary, Croatia,

Slavonia, Serbian Vojvodina and the Banat of Tamizka

13(hereinafter: Act Procedure) from 1852, which was applied in

11Jones, Sabra A., Historical Development of Commercial Arbitration in the

United States, Minnesota Law Review 2296, Minnesota, 1928, p. 243.
12Judicial independence in international tribunals, California Law Review,

Vol. 93, California, 2005, p. 75.

13
Temporary Civil Agent for Hungary, Croatia, Slavonia, Serbian Vojvodina
and Banat of Tamis , 1853, Vienna, available at:
https://books.google.hr/books?id=4rxoAAAAcAAJ&printsec=frontcover&source=gb
s_ge_summary_r&cad=0#v=onepage&q&f=false , accessed: (6/4/2022)
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the territory of the Republic of Croatia (with the exception of

Istria, Dalmatia, Međimurje and Vojna Krajina), we can find the

roots of the first legal regulation of ad hoc arbitration in our

region).

Chapter 17 of the Act contains 10 articles that regulate the

arbitration procedure, stating the rules on arbitrability,

decision-making, execution, choice of court, deadlines for

making judgments. In Article 377 of the Temporary Civil Agent,

the parties are given the choice to entrust the resolution of

their dispute to ad hoc arbitration or to an "already existing

defense court".14

The latter court could be identified with today's

institutional arbitrations that are conducted before an already

established court. For the arbitration agreement to be valid, it

was necessary that the agreement be in writing, and disputes

about the validity of the marriage and the legitimacy of the

child were excluded from arbitrability, for all other disputes

and rights that the parties can freely dispose of, it was allowed

to agree to arbitration.

If the parties decided on ad hoc arbitration, just like

today, they were free to choose an arbitrator, and a very

interesting rule was that the arbitrator had to make a decision

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within nine days from the conclusion of the hearing on the main

matter.

The arbitration agreement was considered invalid in the

event of the death of one of several arbitrators, and the

decisions themselves were made by majority vote. According to

these rules, the arbitration decision could not be challenged

due to the incorrect application of substantive law, but it was

possible to challenge it if causa debendi was not visible from

it 15, if a prohibited transaction or an unsatisfiable claim was

being judged.16

Although the use of arbitration as a means of resolving

disputes was not very prevalent in the 19th century, nor in the

first decades of the 20th century, its popularization occurred

during the First World War. It seems that the development of

arbitration between the two world wars in Croatia was favored by

the unsettled judicial conditions in the state judiciary, as

well as the lack of a unified procedural regime for the entire

country.17

The unification of civil procedural law in the Kingdom of

Yugoslavia followed in the years of the greatest flourishing of

arbitration in Croatia, with the adoption of the Law of Court

15(lat.) basis to which the debt is attached.

Fellmeth, Aaron; Horwitz, Maurice, Guide to Latin in International Law,
Oxford, 2009 , p. 331.
16Triva, Siniša; Uzelac, Alan, Croatian Arbitration Law, Zagreb, 2007, p.

XXXVII.
17 Ibid. p. XXVII.
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Procedure in Civil Litigation from July 13, 1929. The arbitration

rules were contained in about twenty articles under the title

Procedure before selected courts.18

In 1946, the Rulebook on Foreign Trade Arbitration was

adopted at the Chamber of Commerce of the Sovereign Independent

Republic of Yugoslavia (hereinafter: the Rulebook), which

referred to international commercial arbitration. At the time

when Croatia was part of the Yugoslav Federation, the making of

arbitration decisions was exclusively reserved for disputes with

international elements, and the monopoly over conducting

arbitration proceedings was retained by the Foreign Trade

Arbitration.19

Ad hoc arbitration was not prohibited in disputes with

international elements but, it also never developed on the

territory of Croatia at that time, due to the mentioned reason.

The Civil Procedure Act of 1956 also followed this doctrine,

and arbitration was not provided for in disputes without

international elements until the adoption of the Civil Procedure

Act in 1976. After the establishment of the independence of the

Republic of Croatia, the main legal sources of arbitration law

18Ibid. p. XXVII.
19
Triva, Siniša; Uzelac, Alan, Croatian Arbitration Law, Zagreb, 2007, p.
XXVIII.
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were contained in Chapter 31, entitled Procedure in front of

selected courts, of the Civil Procedure Act 20from 1991.

That Law 21also mentions arbitration as a possible means of

resolving disputes with international and non-international

elements, and as a means for resolving disputes about all the

rights the parties can freely dispose.I can be concluded that ad

hoc arbitration was still possible to contract only for cases

with international elements.22

The fundamental solutions of the new Arbitration

Act23adopted by the Parliament of the Republic of Croatia on

September 28, 2001, deviate from the rules valid until then,

following the solutions of international models. First, the New

York Convention on the Recognition and Enforcement of Foreign

Arbitral Awards of June 10, 1958, and the UNCITRAL Model Law on

International Commercial Arbitration of December 11, 1985.24

One of the fundamental novelties of ZA is allowing ad hoc

arbitration also in Croatian national disputes, which do not

20 Civil Procedure Law, consolidated text of the law, SL SFRY 4/77, 36/77,
6/80, 36/80, 43/82, 69/82, 58/84, 74/87, 57/89, 20/90 , 27/90, 35/91
21Ibid., art. 469.: For disputes with international elements about rights

freely available to them, the parties can agree on the jurisdiction of a

domestic or foreign court of choice if at least one of them is a natural
person with a residence or permanent residence abroad, or a legal entity
with its headquarters abroad, if for these disputes the exclusive
jurisdiction of the court in the Republic of Croatia is not foreseen.
22Dika, Mihajlo, The legal position of institutional and ad hoc arbitrations

in Croatian law de lege lata and de lege ferenda , Law in Business, vol.
46, Zagreb, 2007, p. 225.
23 Arbitration Act, Official Gazette 88/01 .
24Triva, Siniša; Uzelac, Alan, Croatian Arbitration Law, Zagreb, 2007, p.

XXXI.
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have the so-called international features. The 25ban on ad hoc

arbitration for national disputes led to the fact that ad hoc

arbitration was almost never carried out in today's Croatian

territory.26

25
International Trade Center, Arbitration and Alternative Dispute
Resolution, Geneva, 2001, p. 157.
26
Triva, Siniša; Uzelac, Alan, Croatian Arbitration Law, Zagreb, 2007, p.
37.