Insights


November 3, 2014


We are happy to inform the public that based on independent professional assessment of legal professionals of the global network International Financial Law Review ODI Law Firm was listed amongst recommended law firms and ranked in Tier 2 in the field of Financial and Corporate law based on its past achievements and results. Our managing partner Uroš Ilić was recognized in the field of Restructuring and Insolvency as the only leading lawyer in this practice area in Slovenia.

Since we are a first generation law firm, we take pride in the fact that we are listed alongside law firms with tradition and international law firms, present in Slovenia.

We are pleased that year by year we are noticed and also promoted in this category with strong competition and still able to confirm our market position with our effort, experience and handling important cases.

The IFLR1000 is the guide to the world’s leading financial and corporate law firms and lawyers. Their first rankings were published in 1990 and we currently research over 120 jurisdictions worldwide.

For more information: http://www.iflr1000.com/Firm/ODI-Law-Firm-Ili/Profile/2778#profile


October 21, 2014


Earlier this month, Elon Musk, owner and CEO of “Tesla Motors”, unveiled the latest models of the Tesla electric cars. The new vehicles are the latest from the wildly innovative companies helmed by Musk, including SpaceX (which ambitiously aims to establish the first human colony on Mars). Even though the new cars are touted as super fast and efficient, the most interesting feature promoted as part of the new vehicles comes in the form of an artificially intelligent system called “Autopilot”, The Autopilot system is an automated driving system primarily designed to prevent accidents and it relies on a combination of radar, sonar and cameras that are able to recognize stop signs, pedestrians and highway barriers.

Driver’s liability

While certainly innovative, the Autopilot sparked a debate over the legal implications concerning liability issues in the event of a traffic accident involving or directly caused by a Tesla car, or other self-driving cars, for that matter. Google is already testing their own driverless vehicles. General Motors, Toyota, Nissan and BMW also have plans to develop driverless technologies in the near future. Musk himself (rightly) asserted that for the time being, the responsibility rests solely on the driver of the vehicle, and not on the company that manufactures them, since the Autopilot relies on human input in order to be able to reach the desired destination “I think we’re going to be quite clear with customers that the responsibility remains with the driver. We’re not asserting that the car is capable of driving in the absence of driver oversight.

On the other hand, Google has taken the stance that any responsibility in accidents involving their self-driving cars should go to Google rather than the individual behind the wheel, who isn’t in charge of driving the car when the accident occurred “What we’ve been saying to the folks in the DMV, even in public session, for unmanned vehicles, we think the ticket should go to the company. Because the decisions are not being made by the individual”, said Ron Medford, safety director for Google’s self-driving car program.

DriverlessThere are other issues that need to be considered. Bryant Walker Smith, in his essay “My Other Car is a…Robot? Defining vehicle automation“, notes the subtle distinction between the terms “automation” and “autonomous”, whereby the prevailing term in Europe is “automation”, which is described as the replacement of human labor with technology, and “automated driving” as driving performed by a computer. This is contrasted to “autonomous driving”, a term prevalent in the US, which could be described as driving performed by itself. The AI system included in the Tesla cars would therefore be considered as automated driving, due to the fact that a human driver is required to give directions to and monitor the computer software, ensuring its proper functioning.

International legal framework

The human element in automated driving systems is evident in the most important legal document that governs international traffic law, the 1949 Geneva Convention on Road Traffic. The Convention aims to establish road safety of international traffic by establishing certain uniform rules.

Article 8 of the Geneva Convention stipulates that “every vehicle or combination of vehicles proceeding as a unit shall have a driver”. Paragraph 5 of the same article contains a clause which makes clear that the vehicle must be controlled by a driver “Drivers shall at all times be able to control their vehicles…When approaching other road users, they shall take such precautions as may be required for the safety of the latter.”. Article 4 (broadly) defines the driver as “any person who drives a vehicle”. By defining a driver as “any person”, the Convention does not prohibit the automated operating of a vehicle, thereby making fully automated driving and automated vehicles fully within the bounds of the law. Moreover, strictly speaking, these persons could constitute a non-human entity, which means that the companies that manufacture these vehicles could be seen as drivers for the purpose of the Geneva Convention.

The 1968 Vienna Convention on Road Traffic contains stricter obligations for the driver of a vehicle. Article 8 stipulates that “Every moving vehicle or combination of vehicles shall have a driver”. Pursuant to paragraph 3 of the same article “Every driver shall possess the necessary physical and mental abilities and be in a fit physical and mental condition to drive.” The article goes on to impose an obligation for the driver to “at all times be able to control his vehicle…” The Convention (Article 1) defines the driver as “any person who drives a motor vehicle or other vehicle…on a road”.

The language of both the Geneva and Vienna Conventions suggest that an automated driving system would not contravene the treaties, as long as there is sufficient control over the vehicle, imposed by a driver.

Looking into the future

As much as we are witnessing a broader debate over the safety of self-driving vehicles, we are still years, if not decades, away from seeing these vehicles on the commercial roads. However, the first ground-breaking step was undertaken in 2012, when Jerry Brown, the Governor of the State of California in the United States signed a bill establishing safety and performance guidelines for autonomous vehicles along with Google co-founder, Sergey Brin. The bill permitted the operation of driverless vehicles on public roads for testing purposes.

Even so, US is cautiously threading towards introducing self-driving regulations, with just four states (California, Nevada, Michigan and Florida) that passed such bills so far. American citizens remain skeptical, whereby 9 out of 10 US citizens said that they are worried about riding in a driverless car. One might assume that this skepticism belongs to older drivers, but the polls show that 84 percent of drivers aged 18 to 34 also expressed concerns over the safety of the software that will be in charge of their cars. On the European front, the UK is slowly but surely embracing these technologies, with the first driverless cars slated to hit the streets as soon as January 2015, and Sweden has already allowed Volvo to test driverless technology in its vehicles.

The path that lies before lawmakers is twofold: first, it is of extreme importance that legislators carefuly up to technological advances and breakthroughs in order to prevent a legal chaos if a sound legislative framework is not established prior to the occurrence of accidents involving driverless cars. Second, and most important, the implementation of these technologies, and subsequently, the legal regulations, are dependent on the trust the citizens and lawmakers alike will place in driverless technology, and how safe they would feel to “hand the wheel” to an artificially intelligent system. Novel technologies are always embraced with skepticism, as history repeatedly showed us. Will this be a similar story, only time will tell. For the time being, the law will be determined on a case by case basis, having regard to particular circumstances surrounding the accident caused by a driverless vehicle, i.e. a vehicle where no human input was required.

With cars akin to the automated driving systems now present in Tesla cars, the situation is sufficiently clear – the driver is generally responsible for any accidents occurred on the road, barring any technical and/or mechanical error. However, in the case of an autonomous system operating on its own and drawing its own conclusions based on previous actions of the human driver, the situation gets tricky. In this event, the manufacturer has a much closer connection to the day-to-day operation of the vehicle. After all, the manufacturer is solely responsible for the development of the software which controls its vehicles. If we revisit the language of both Conventions, the manufacturer assumes here the role of a driver of a conventional car.


October 16, 2014


The Buzz is a section in the CEE Legal Matters magazine, which gives insights about relevant topics of interest in the countries mentioned. The contributors, law firm partners and legal journalists/commentators, choose an issue which they believe needs attention and summarize it for each CEE country. For Slovenia, ODI Managing Partner Uroš Ilić spoke about the ongoing privatization process that is about to close and its impact on the market.

“Privatizations … bidders … mandates …”

Mr. Ilić started with noting that the Slovenian market is relatively quiet on the legislative developments front and, considering that the new Government has been formed very recently, at the end of September, this is unlikely to change before the end of the year.

In terms of legal work, the two practice areas keeping lawyers busy are restructuring – which has been a buzz practice for the last 4-5 years and is still leading the league tables in terms of deal volume – and privatization. The latter has seen a reboot this year with 4 big state-owned companies already sold: Helios (coating production company), Fotona (a laser technology company), Letrika (automotive company), and Ljubljana Airport. The Slovenian Government announced it is aiming to close several of the remaining 12 companies to be privatized by the end of the year, including Telekom Slovenia, a deal that is estimated to have a value 6-7 times larger than the sale of Ljubljana Airport.

Despite having doubts over how realistic it is to expect a closing of any more of these privatizations by the end of the year, Ilić explained that the push is an encouraging development for law firms: “Whether a deal closes by the end of the year or in February/March, they keep the whole market busy on a rolling basis because in reality all of the leading law firms in the market have some form of a mandate from a number of potential bidders, which can include up to 10 per company to be privatized.”

For more information: http://ceelm.com/index.php/analysis/item/1786-the-buzz-august-october


October 15, 2014


On 11th of November 2014 a Slovenian arbitration conference will be held in Austria Trend Hotel Ljubljana. The conference is being organised by Ljubljana Arbitration Centre at the Chamber of Commerce and industry of Slovenia, one of the main sponsors is ODI Law Firm. Partner Gjorgji Georgievski will participate in a panel: Arbitration in intra ex-Yu Commerce, where they will discuss the cultural and legal similarities in business procedures in the former countries of Yugoslavia (Ex-Yu), which allows economic cooperation and investment opportunities. Mag. Uroš Ilić will participate in the panel: Recovery of capital markets and opportunities for arbitration.

The panel will deal with opportunities for arbitration to resolve disputes arising from mergers and acquisitions, financial restructuring of systemic enterprises, financial disputes and procedures for the privatisation of state-owned companies. You are cordially invited.

 


October 7, 2014


Mag. Uroš Ilić will attend IBA conference in Tokyo which will be held from October 19th up to October 24th 2014. Japanese Prime Minister Shinzo Abe will open the conference who is going to be a keynote speaker. The conference will have more than 180 working sessions covering all areas of practice relevant to international legal practicioners which offers an opportunity to generate new business with the leading world’s firms.


September 25, 2014


Mag. Uroš Ilić attended an international conference “Changing perspectives” which took place in London on September 21st up to Septebmer 23rd. International Referral successfully organized the largest gathering so far for legal experts from various fields which is an excellent opportunity for exchanging concepts and ideas.


August 24, 2014


Overview of Privatization in the Energy Sector

The energy sector in Macedonia has been one of the areas where privatization has progressed with the most difficulty. Up to 2004, the vertically-integrated and stateowned JSC Macedonian Electricity Company (MEC) exclusively provided the generation, transmission, distribution, and supply of electricity, as well as imports, transits, and maintenance of the integrity of the electricity system. In 2004, MEC was split into two independent new joint-stock companies. Its legal successor MEPSO assumed the transmission function, while ESM assumed the electricity generation, distribution, and supply functions. In 2005, ESM was further unbundled into two independent joint-stock companies: Macedonian Power Plants (MPP), which assumed the electricity generation part of the company, and ESM, which retained the electricity distribution and supply parts. In 2006, ESM was privatized by Austria’s EVN AG and was rebranded into the EVN joint-stock company. As a result of the restructuring and privatization process, therefore, the key players in the electricity market currently are three separate and regulated monopolies: (i) generation – the state-owned MPP; (ii) transmission – the state-owned MEPSO; and (iii) distribution and supply – the privately owned EVN.

Privatization of MPP

Recently, the Government has announced its intention to privatize the 100% state-owned MPP by increasing its share capital and offering private investors the opportunity to purchase up to 49% of newly issued shares. The process for hiring a privatization consultant is underway, and it is therefore likely that the international public call for the privatization will be published in 2015.

Why is the privatization of MPP important?

MPP generates more than 90% of the nation’s electricity. It owns and operates the main national generation facilities: (i) the thermal power plants in Bitola and Oslomej, with a total installed capacity of 800 MW; and (ii) seven large hydropower plants, with a total installed capacity of over 500 MW. It also acts as the wholesale electricity supplier for the retail supplier EVN. The estimated value of 49% of MPP’s shares is approximately EUR 750 million. Therefore, this will be the largest privatization in Macedonian history (the largest Macedonian privatization to date was the EUR 388 million sale of Makedonski Telekom to Hungarian Matav in 2001). For now, the largest privatization in the energy sector remains the sale of EVN’s shares in a transaction of EUR 225 million and an investment obligation amounting to EUR 96 million in the three-year period following the sale.

How will be the privatization organised?

The key legislation that governs the privatization process in Macedonia is the Law on Transformation of Enterprises with Social Capital (OJ 38/93) and the Law on Privatization of State-owned Capital (OJ 37/96). Both laws provide foreign investors with equal rights to domestic investors in the tendering and privatization process for sale of Government’s shares in state-owned enterprises. It is very likely that the privatization will be organized similarly to the sale of EVN, which was organized through an international public call for a trade sale in a one-round bidding process. The ranking criteria for the received bids were the purchase price and a three-year investment commitment. In the case of MPP, it is reasonable to expect that the Government will also apply an investment commitment criterion, as it has announced that it expects the successful bidder to make additional investments in the development of electricity generation facilities.

What will be the main legal concerns?

Any attempts by the Government to “clean” or restructure MPP prior to its sale (e.g. write-off state debt, debt-to-equity conversion, and capital increases before privatization) will in many instances constitute state aid if they are not compliant with the “market economy investor principle” (i.e. if a public authority invests in the enterprise on terms and in conditions that would be acceptable to a private investor operating under normal market economy conditions, the investment is not considered as state aid). The Government’s enthusiastic efforts to attract foreign investment by providing various incentives to international corporations are well known. Therefore, it is of critical importance for the Government to organize the privatization through a well-publicized, transparent, unconditional, and competitive tendering process, to provide prospective bidders with access to all relevant information for valuation of the share package and to ensure that there is no discrimination based on the nationality of the prospective bidders. The Government will remain the majority shareholders in MPP (51%) and will therefore retain control of management. The successful bidder will want to ensure that it has a voice in MPP’s management and that there is an effective dispute resolution mechanism in place. The memory of the dispute between the Government and EVN AG in connection with EVN’s sale is still fresh. In 2009, EVN was ordered by the Macedonian courts to pay EUR 200 million to MPP on the basis of a debt deriving from unpaid electricity bills from consumers, before the privatization. Not long after EVN AG filed a claim for arbitration against the Government alleging a breach of the Bilateral Investment Treaty between Macedonia and Austria, the parties settled.

Contact: gjorgji.georgievski@odilaw.com

First published in CEE Legal Matters Magazine (Year I, Issue 3, June 2014)

 


June 26, 2014


The 4th IFN Europe Forum and 8th IFN event in Europe is taking place on 26th of June and is one of IFN’s most anticipated events of the year. Mag. Uroš Ilić is attending IFN conference which is held in Luxembourg under the title “Islamic Finance in Europe: Regulatory Advancements, Growth Opportunities and Investment Opportunities” and is bringing together the Islamic finance experts from all corners of the globe.


April 16, 2014


We are happy to inform the public that based on independent professional assessment of legal professionals of the global network Chambers and partners Law Firm Ilić was listed amongst recommended law firms in the field of corporate and commercial law based on its past achievements and results, whereas mag. Uroš Ilić, attorney specialist for corporate law, was listed amongst notable leading practitioners in the field of corporate and commercial law.


April 15, 2014


Dear partners, we gladly inform you that ODI Macedonia operates in new business offices at Leninova no.37/1-14, Skopje. The rest of contact information remain the same.

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