Montenegro’s iconic resort, Sveti Stefan, and Villa Miločer, currently leased by Adriatic Properties, have agreed to the government’s proposal to suspend the arbitration proceedings before the International Tribunal in London for three months and reopen the elite resort during this time.
The agreement, confirmed by multiple sources to “Vijesti,” entails that both parties will use this three-month period to negotiate and resolve any outstanding issues they may have, aiming to exit the arbitration process amicably.
While the lessee promptly accepted the government’s proposal, setting May 30th as the deadline to jointly inform the Arbitration Court of the suspension, there has been no response from the government to the lessee’s messages, as reported by “Vijesti.”
If the deadline passes without notifying the Arbitration Court, the proceedings cannot be suspended, meaning that Sveti Stefan will face its fourth summer under lock and key.
After a complete closure in anticipation of the 2021 summer season, followed by two years with a locked gate, the island partially reopened to visitors last year but remained off-limits to guests.
Both the lessee, Adriatic Properties, and the government-owned Hotels and Tourist Enterprise Miločer, responsible for the operation of the elite resort, are awaiting government action. The latter faces a dire financial situation, as the lessee has not paid any rent for nearly a year.
HTP Miločer and Sveti Stefan hotels, majority-owned by the state, are obligated to pay Adriatic Properties £600,000, covering the costs of the arbitration proceedings in London. The ongoing dispute between Adriatic Properties and state-owned companies revolves around contractual breaches, with Adriatic Properties seeking €100 million in damages.
The delay in rent payment, exceeding a million euros, has halted operations at HTP Miločer and Sveti Stefan hotels. According to Executive Director Igor Đurašević, Adriatic Properties has not paid three quarterly installments, totaling €315,000.
With the fate of Sveti Stefan hanging in the balance, locals have voiced their frustration, warning of potential protests if the resort remains closed beyond June 15th.
Sveti Stefan, a symbol of Montenegrin tourism, celebrates its 64th anniversary this July. Despite promises from various political actors, the resort’s gates have remained shut, amplifying the community’s discontent.
The future of Sveti Stefan remains uncertain, pending government intervention and potential resolution of the legal impasse between Adriatic Properties and state-owned entities.
