Razvoj Golf and Elitech Initiate Arbitration Against State over Golf in Dubrovnik

Total Croatia News

Another major international investment is heading for the courts.

Razvoj Golf company and Elitech have submitted a request to the International Centre for Settlement of Investment Disputes (ICSID) based in Washington to initiate an arbitration procedure against the Republic of Croatia, due to a golf project on Srđ Hill above Dubrovnik. The ICSID webpages only cite short information that the request was received on September 6, 2017, reports HINA. Elitech is the founder of the Razvoj Golf company, representing the investors in a project to build a sports and recreation centre with a golf course, worth several billion kunas. Ministry of Construction and Physical Planning issued a location permit on October 12, 2015 for the golf project on Srđ to Razvoj Golf during a period when the government operated only in technical capacity. The permit came into effect on October 23, and included the construction of a sports-recreation centre with a golf course (18+9 holes), the construction of a water supply pipeline (pipeline and buildings) and the reconstruction of the public road from the Adriatic touristic road to Bosanka.

As cited in the location permit, Razvoj Golf submitted the request on July 31, 2015, and it was determined the plans were coherent with the county zoning plan and those of Dubrovnik, as well as others. The citizen initiative Srđ je naš (Srđ is ours) filed an administrative dispute against that location permit. This initiative was against the realisation of this project form the beginning, claiming it is illegal. They pointed out, among other things, that the zoning plan envisioned a sports-recreation centre on Srđ to be built in the interest of citizens, and as the project began to grow, thus grew the appetites of investors and adapted, rising from an estimated value of 90 million euros in 2003 to surpassing a billion euros, while the golf project was reduced from three courses and public services to one course, changing everything else to apartments and villas for sale.

The Administrative Court in Split annulled the location permit in February of this year, after the environmental study of the project was rebutted in September of last year. Representatives of the Razvoj Golf company, Maja Brinar and her husband, Israeli investor Aaron Frenkel, have already announced the possibility of a lawsuit over this project, stating that even after 10 years and 130 million euros invested they cannot start the project. According to some media, the value of this lawsuit is estimated at 500 million euros.

“Due to total blockage of the project and annulment of permits already issued due to administrative failings of state bodies, we have decided on this action to secure our rights as investors who have been attempting for 10 years to realise this project, while investing over 130 million euros by now. By obeying procedure and striving to reach an agreement, we sent in December of 2016 a letter to the government ahead of the arbitration with an invitation to peaceful resolution of mutual issues, but this did not lead to any specific progress. with the goal of protection our investment and the project, arbitration was the last, unwanted move we were forced into after complete blockage the project faced, although not due to any failings on the side of the investor,” stated Ivan Kusalić, a procurator with the Razvoj Golf company.


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