FAMILY TIES (CJA: part 3)

A CORPORATE–JUDICIAL AFFAIR IN BiH part 3

In the first part of the series “A corporate-judicial affair in BiH”, we published the text titled “Judicial ineffectiveness in the service of individual unjust enrichment”. There we described how the Municipal court in Mostar and the judge presiding over the case have intentionally abused her discretionary autonomy, afforded to her by virtue of her position as the judge, to undertake an incredible scheme – they usurped the judicial competencies of the Supreme court of FBiH. They placed themselves in the role of a sovereign and above the Constitution.

In the second part of the series “Corporate-judicial scandal in BiH”, we published the text titled “The Drawer” model of obstruction of the rule of law”, where we presented evidence in the form of a document signed by the judge presiding over the case, Nina Ratkušić. The document details violations of professional standards of judicial duty and unjustified delay of the process of counter-enforcement, thereby illegitimately favoring one, and damaging the other party.

You can find the entire timeline of undue delays in the process, based on the exact data from court’s documents, in the first text, which can be found here. In the second text, we analyze evidence of violations of professional standards of judicial duty. That text can be found here.

We will continue to refer to the parties in the case in pseudonyms in order to avoid marketing, and will accordingly refer to the party that the Court in Mostar favors as: the local builder, and the party discriminated by the Court as: the international bank.

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After we published the second text, we learned that the president of the Cantonal court in Mostar Rabija Tanovic on 21.11.2019., issued a repeat order for urgent action addressed to the president of the Municipal court in Mostar Divna Bošnjak and to the judge presiding over the case, Nina Ratkusic, who had been unjustifiably and illegally blocking the counter-enforcement order.

The President of the Cantonal court noted that she had sent the same order to the Municipal court in Mostar four months prior, on 11.06.2019, for URGENT decision on the appeal by the local builder, and that the second request was a repetition of the same order, needed because no action has been taken in the matter.

The order in question confirms that the Net Consulting team’s research, and findings of illegal obstruction of the court case were well-founded. Therefore, we can reasonably say, with high level of certainty, that in the case at hand the undue delays and waste of time by the court in Mostar show existence of high risk of corruption.

We shall illustrate reasons why the judge Nina Ratkušić is blocking the order for counter-enforcement, and who benefits from her incompetence. Below is an example of one illegal activity in this case, which is indicative of the existence of risk of corruption.

Fraud in the form of “pre-contracts”

As a short recap, let us remember that the local builder failed to make payments on the loan he got from the international bank, for the purpose of building real estate for sale. In order to avoid his legal obligations toward the international bank, he filed a lawsuit with the Municipal court in Mostar, claiming that the international bank is to blame, because he did not sell all the condominimums as he had planned. In his claim, the local builder demanded compensatory damages for lost profits in the amount of sale value of the real estate he did not sell. Just for good measure, he also included a kitchen sink of terminology on damages, as well as invented and non-existent in the legal nor in the economic sector.

The local builder proved his damages with so called “pre-contracts” for sale of real estate with several different individuals. Contrary to the written agreement with the international bank, these pre-contracts were drafted in the builder’s office and not notarized.

NOTE: Legally, the above-metioned “pre-contracts” only had the power of notice of intent to purchase the real estate, NOT a sales contract.

The Municipal and Cantonal courts in Mostar forced the international bank to pay out the damages in the amount demanded by the local builder. At the same time, the local builder remained owner of that real estate, free to sell them again. Thus, with the complicity of the judiciary, the local builder in effect doubled his illicit profits. Keep in mind that the amount in question in this case is several tens of millions BAM.

EXAMPLE: Pre-contract between the local builder and Mrs. Ljerka Ostojić

One of the pre-contracts, (or notes of intent to be precise) listed in the lawsuit was a pre-contract with Mrs. Ljerka Ostojić. According to the findings of the court expert Zijo Veledar, Mrs. Ostojić was supposed to purchase a 300 m2 commercial real estate for the price of 1.170.000 BAM. Mrs. Ostojić never applied for a loan from the international bank. Therefore, by paying out the damages determined by the court to the local builder, the international bank paid for the value of this piece of commercial real estate as well, in the amount of 1.170.000 BAM.

After the international bank paid the ordered damages to the local builder in July 2016, Mrs. Ostojić allegedly decided to not go through with the purchase. As a result, the local builder refunded Mrs. Ostojić’s downpayment. These facts were confirmed in the letter dated 05.01.2018. by the judge Majna Lovrić, who presided over the original case and addressed to the president of the Municipal court Divna Bošnjak: “considering the circumstances and the fact that the “local builder” refunded the down payment to Mrs. Ljerka Ostojić as one potential commercial real estate buyer, after NON-PERFORMANCE of pre-contracts for the purchase of commercial real estate.”

The above also means that the international bank paid the local builder, among other things, for alleged damages on the basis of the value of the pre-contract with Mrs. Ostojić in the amount of 1.170.000. The local builder then used the money from the judgment to repay Mrs. Ostojić’s advance and keep the commercial space for himself, only to sell it later on.

However, this is not the end of the collusion between the local builder and Mrs. Ostojić. On the contrary, it continues to this day.

On 14.09.2016, on the basis of the contract for sale of property, which was notarized on 23.08.2016., the Office of the Land Registry of the Municipal court in Mostar registered transfer of ownership interest in residential property in the same building. The notary Danko Vucina from Mostar – number OPU-IP 465/2016 documented the transfer of ownership interest in the property in favor of Mrs. Ostojić for an apartment with the size of 53.01 m2 in the same commercial-residential building owned by the local builder.

The parties agreed on a purchase price in the amount of 1.560,00 BAM/m2, and the contract price in total amounted to 82.695,60 BAM. The sale was not finalized via bank account, nor in a notary office, which is the usual and standard way of paying for real property payments. The sale contract stated that the purchase price was paid in a lump sum, in cash. Without any documentation of payment, this type of transfer raises doubts as to the veracity of the claim that any money was paid to the local builder.

Soon after this transacation was finalized, using the same process, another apartment was registered in the same commercial-residential building owned by the local builder. On 27.10.2016, the Office of Land Registry in Mostar documented another transfer of ownership interest to Mrs. Ostojić, this time for an apartment in the same building, with the size 48,66 m2, based on the contract dated 31.08.2016., notarized in the same notary office. The price indicated in the contract was the same as in the above contract, namely, 1,560.00 BAM/m2, or in total 75.909,60 BAM. The purchase price in both cases was not transferred via bank transfer, nor at the time of the signing of the contract in the notary office. Rather, the payment is allegedly paid on a separate occasion, in a lump sum in cash.

Conflict of interest by the Judge Majna Lovrić 

The above described contract with Mrs. Ostojić is not only unique and unusual due to the process which involved the pre-contract, refunding of the downpayment, and paying for two apartments in cash, with no money trail documenting the sale, as is usual practice. In addition, Mrs. Ostojić is not only the alleged interested buyer of the commercial space as indicated in the pre-contract, or the owner of the apartments from the sale contracts. She also has family ties to the judge Majna Lovrić (husband’s sister), the same judge that issued the original verdict in this case in favor of the local builder, damaging the international bank.
After this relationship was exposed, the Municipal court began its contradictory interpretations for excusing the judge, depending on the interests of the local builder.

An example is a finding from 27.12.2016 where the Municipal court rejected the request to excuse judge Majna Lovrić. It justified its finding with the statement of the judge: “…that at the time of processing of this case, there were no familial relationships, because they stopped with the death of her husband on 18.10.2012.”

This interpretation of the conflict of interest issue by the judge Majna Lovrić is completely contrary to the Guidelines on prevention of conflict of interest, which can be found on the following website: https://pravosudje.ba/vstv/faces/docservlet?p_id_doc=35081

The guidelines discuss nepotism, on page 24, point 1.3. and define it as following: “If the bearer of judicial function knows that a member of his family or other closely related person has financial, political or other interest in the case, he should ask to be excused from the proceedings.”

President Divna Bošnjak playing games with the justice system

Next, on 22.01.2018, the president of the Municipal court Divna Bošnjak again rejected the request for excusing judge Majna Lovrić in another related case, mistakenly referring to the European court’s judgment in Hauschild v. Danske – “In order to prove subjective lack of bias, the Court demands evidence of concrete bias. There is a presumption of personal lack of bias on part of a regularly appointed judge until proven otherwise.”

The fact that the domestic judiciary wrongly references the above-mentioned judgment of the European court reveals lack of awareness and understanding on the part of the judiciary about the concept of conflict of interest. In this particular case, the court wrongly refers to the level of evidence of bias that the court requires.

Namely, the conflict of interest is a situation (NOT ACTIONS) in which an individual in a position of power (or a member of his close family), has simultaneous, mutually competing, professional and presonal interests.

This means that when the bank reported the situation in which Mrs. Ostojić is judge Majna Lovrić’s sister in law, the judge should have excused herself on her own accord, because of the POSSIBILITY of bias in processing the case. Instead, judge Divna Bošnjak went in a completely opposite direction, without understanding the concept of conflict of interest, and concluded that there is a need for concrete evidence of bias.

When it comes to conflict of interest, there is no need to prove concrete instances of biased behavior, but the SITUATION of conflict of interest is resolved with the judge excusing himself before the case proceedings begin. Moreover, the cited case of Denmark, from the European court, dealt with a situation when before there was conflict of interest in existence, a judge presiding over the case for some other reason acted in a biased manner. For example, in practice it is possible that the judge has no familial or close ties with the party in a particular case, but there still can exist the suspicion of taking a BRIBE from one of the parties in the case. This is then the behavior which is the reason for biased behavior. In that case, concrete evidence of bias must be proven.

Judicial pick-and-choose principle in Mostar

In order to illustrate how the president of the Municipal court Divna Bošnjak inconsistently applies judgments from the European court, by taking different verdicts and using wrong interpretations in service of current needs, we present another decision on the request for recusal of the judge Majna Lovrić from the process of deciding on temporary measures in favor of the international bank.

In the third related case proceeding, which would decide in favor of the international bank, a chain of recusal from judges ensued, so on 01-06-2017 the president of the Municipal court Divna Bošnjak granted recusal of the judge Majna Lovrić, but this time referencing a different European court’s judgment – Piersack v. Belgium – “any judge, for which there is a legitimate reason for fear of bias must excuse himself from the trial. If there is reason for suspicion, even if subjectively there is no indication of bias, it still represents an unacceptable endangerment of the trust that the court must maintain.”

Net Consulting team discovered that the Municipal court in Mostar is using the verdict from the Denmark case when they want to refuse the recusal, and then in the same or similar case, when they want to grant the recusal, they use the Belgium verdict. Judgments of the European court are undisputably applied to the wrong context, and the Municipal court in Mostar clearly uses them in accordance with the pick-and-choose principle, depending on the momentary tastes and needs.

Such inconsistent and unprincipled behavior indicates bias, and even risk of existence of corruption as reasons for unprofessional behavior. There is no other reasonable way to interpret that the judge Nina Ratkusic, free of almost all oversight of her work, holds the case files in her drawer without any justification, for all of 396 days thus far.

Next part of this series will cover the responses to this exposé by the Office of the disciplinary prosecutor and the Prosecution in Livno.

End of part three.