Support for effective implementation of the consensual financial restructuring law (out of court restructuring)

The Legal Transition Programme of the European Bank for Reconstruction and Development’s technical assistance program, in the field of insolvency and restructuring, promotes the reorganisation of businesses in financial difficulty and the development of out-of-court workouts as an alternative to court-led processes. In 2011, a Consensual Financial Restructuring Law was adopted by the Serbian Parliament with the aim of encouraging out-of-court financial restructuring. The Consensual Financial Restructuring Law establishes a framework, administered by the Serbian Chamber of Commerce and Industry (CCIS), in which the terms of a financial restructuring can be agreed between a debtor and two or more of its banking creditors using the services of a CCIS appointed mediator.

However, the number of financial restructuring cases before the CCIS was very low. This was due in part to lack of stakeholder awareness of the new procedure and its benefits, as well as unfamiliarity of local stakeholders with the mediation framework in which the consensual financial restructuring cases are conducted. ADR Center was part of a consortium, led by Partners for Democratic Change Serbia, selected to conduct a series of activities aimed at enhancing the institutional capacity of the CCIS and improving stakeholder awareness, understanding and confidence in the consensual financial restructuring procedure. ADR Center provided mediation expertise and services in furtherance of the project objectives