FLASH
Shkruar nga Nga redaksia Pamfleti – Shkodër | Podgoricë
The Constitutional Court of Montenegro overturns the previous decision and gives the local judiciary the power to decide on the broken contract with “Adriatic Properties”. Millions of euros and the international reputation of the state are at risk...
The recent decision of the Constitutional Court of Montenegro to return the conflict over the Sveti Stefan resort to the jurisdiction of local justice marks a critical turning point in one of the most complex legal and economic battles that has engulfed the Montenegrin state since its declaration of independence.
At the center of this clash is the company "Adriatic Properties", an entity registered in Montenegro, but controlled by the Greek-Israeli group "Restis Group", with a strong interest in the management and development of luxury tourism in the region.
What is "Sveti Stefan" and why is it important?
Sveti Stefan is a small island connected to the mainland by a strip of sand, a postcard symbol of Montenegro and a high-end tourist attraction that has welcomed kings, presidents and international stars for decades.
In 2007, as part of efforts to attract foreign capital, the Montenegrin government granted a 30-year concession to the Adriatic Properties company for the most exclusive resorts on the coast – Sveti Stefan, Vila Miločer and Kraljičina Plaža. The deal was presented as a major economic and diplomatic success: millions of euros in investment, management by global chains (such as Aman Resorts), and a promise of an exclusive and elite Montenegro in tourism.
How did the collision start?
The problems started gradually: allegations of closing beaches to the public, lack of transparency about investments, non-fulfillment of contractual conditions, but also political tensions. In 2021, the Montenegrin government decided to unilaterally cancel the agreement with Adriatic Properties, accusing the company of breach of contract and blocking public access to beaches that were historically part of the national heritage.
The company did not accept the decision and sued the state in international arbitration in London, while also initiating proceedings in the courts of Montenegro to protect the contract.
Constitutional Court decision: return to basics
By its decision dated 9 February 2026, the Constitutional Court of Montenegro accepted the appeal of “Sveti Stefan Hoteli” AD Budva (under the control of Adriatic Properties) and overturned the previous position of the Supreme Court (Vrhovni sud), which had refused to examine the case, citing the international arbitration clause in the contract.
The Constitutional Court's argument was clear: Montenegrin courts cannot waive their jurisdiction solely because a party has international connections. The parties are registered in Montenegro, the property is located on Montenegrin territory, and the issue involves public interests, so the decision not to review the contract by the domestic courts was deemed a violation of the right to access to court.
What is Montenegro at risk of?
In the ongoing international arbitration in London, the company is claiming huge damages amounting to tens of millions of euros for breach of contract. If the Montenegrin courts now handle the matter independently, there is a possibility that the arbitration claim will be dropped or the state position will be better protected.
But if local courts fail to handle the matter with professionalism and transparency, Montenegro risks a serious financial and image loss in the eyes of international investors.
Geopolitical context
This conflict comes at a delicate moment for Montenegro, which is in the final stages of EU accession negotiations, where the rule of law and transparency in the handling of public contracts are absolute priorities. The “Sveti Stefan” case is a serious test for the Montenegrin judicial system and its independence from political and economic influences.
The “Sveti Stefan” case is much more than a property conflict. It is a reflection of the clash between the interests of foreign capital and economic sovereignty, a testament to the weaknesses of the judicial system in the region, and a true test of the handling of international agreements by small Balkan states.
If Montenegro wins this battle in its own courts, it will be a message that the rule of law can work. But if it fails, the consequences will be felt far beyond the shores of the Adriatic./ Pamphlet
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