The Maritime Captains Association of Montenegro (UPKCG) has sent an open letter to the media, addressed to the Prime Minister of Montenegro, Milojko Spajić, regarding the proposal for a business-technical cooperation agreement between AD “Crnogorska plovidba” Kotor and AD “Barska plovidba” Bar.
Here is the letter in full:
“Dear Prime Minister, Mr. Spajić,
We are addressing you as a professional non-governmental association in connection with the proposed Business-Technical Cooperation Agreement between AD “Crnogorska plovidba” Kotor and AD “Barska plovidba” Bar.
For your information, the Maritime Captains Association of Montenegro (UPKCG) has already issued a statement regarding the Information on the urgent need to address the liquidity issues of the joint-stock company Crnogorska plovidba, which was adopted by the Government of Montenegro. This information contains an overview of activities, including the business-technical cooperation model between the two shipping companies, which activities involve:
- Barska plovidba leasing ships owned by Crnogorska plovidba, which are currently on lease until September 2025. The rental fee will be determined based on the current market conditions.
- In exchange for the leased ships, Barska plovidba will advance and pay Crnogorska plovidba up to 1,000,000 euros during 2025 to cover the future lease payments. The advance payments will be used by Crnogorska plovidba to settle overdraft loans with Prva Banka AD, pay salaries, and cover other operational expenses related to the ships, including fuel, oil, spare parts, and consumables.
In our previous statement, we already pointed out the contradictions in these activities. The first activity suggests that Barska plovidba will lease ships and pay lease fees to Crnogorska plovidba. However, the second activity of the same plan involves leasing, not a lease agreement, and paying rent instead. We have also noted the distinction between a Lease Agreement and a Bareboat Charter Agreement and the consequences these differences could have for both shipping companies.
By proposing such an information document to the Government of Montenegro, the Ministry of Maritime Affairs has shown a lack of understanding of the difference between a ship lease and a bareboat charter, as well as basic business models of shipping companies, i.e., models of commercial exploitation of ships. In other words, we emphasize that there are significant differences between the lease and charter of a ship, and the Ministry of Maritime Affairs should have been aware of these differences or consulted the industry before presenting this information to the Government, which you lead.
Moreover, in our previous statement, we pointed out that both the ship lease and bareboat charter agreements are regulated by Montenegrin legislation, specifically the Law on Maritime and Inland Navigation, and we raised the question of how the subject of the Business-Technical Cooperation Agreement could be either a lease or a charter of ships.
The response came via the Law on Free Access to Information. The UPKCG obtained the Draft Business-Technical Cooperation Agreement, which will be discussed by the shareholders of the two shipping companies at a meeting scheduled for May 19, 2025.
Below, we provide our observations regarding the content of the Draft Agreement.
The Draft Business-Technical Cooperation Agreement is completely contradictory to the information that was reviewed and adopted at the Government of Montenegro session. The subject of this Agreement is not the lease or charter of ships owned by Crnogorska plovidba, which makes its provisions in direct contradiction to the information reviewed and approved by the Government of Montenegro, as proposed by the Ministry of Maritime Affairs. Therefore, we urge the Government of Montenegro to hold the responsible Minister and his associates accountable for approving one rescue plan at the Government session, while another plan is being implemented in practice. Since this involves state-owned property of significant value, we believe the Government of Montenegro should involve the Protector of Property and Legal Interests of Montenegro, who should use their legal authority to halt this course of action by the Ministry of Maritime Affairs.
Although Article 1 of the Draft Business-Technical Cooperation Agreement specifies that the subject is the management of Crnogorska plovidba ships, the actual subject is consulting and mediation in the chartering of ships.
The Draft Agreement contains only five articles, and as mentioned, it is titled the Business-Technical Cooperation Agreement. Such an agreement is not specifically regulated by the Law on Obligations, and thus it is based on the general rules of contract law. While this agreement allows flexibility in defining the rights and obligations of the parties, it must not contradict mandatory provisions, public order, or good business practices. Therefore, in practice, it is used when two or more parties wish to combine resources, knowledge, or technologies to achieve common goals. In legal terms, this unnamed agreement should be viewed through the lens of the Law on Obligations.
Since these ships operate on the international market, the provisions of such an agreement must not contradict internationally accepted maritime law practices, international obligations binding on Montenegro, or Montenegrin legislation.
In this regard, Article 1, which defines the subject of the agreement, specifies that Crnogorska plovidba entrusts Barska plovidba with the management of the ships “Kotor” and “Dvadesetprvi maj.” Furthermore, management in the context of this agreement includes services such as negotiating lease rates for ships, supporting and advising on operational matters related to securing spare parts, fuel, and other consumables, insurance, regular servicing and repairs, crew provision, and other resources and logistics necessary for the operation and sailing of the ships. However, the agreement does not define Barska plovidba as the “Company” or “Manager” of the ships, nor does it transfer responsibility for ship management to Barska plovidba under the provisions of the Law on the Registration of Ships, Floating Objects, and Installations for the Production of Hydrocarbons.
As mentioned above, the subject of this agreement is not ship management, but rather providing consulting services and mediation in ship chartering.
In conclusion, the proposal for this agreement appears to be flawed and harmful, especially to Crnogorska plovidba, which, according to the agreement, retains all three components of ship management (Technical, Commercial, and Crew Management). Therefore, it is unreasonable for Crnogorska plovidba to pay Barska plovidba a 9% fee of the total revenue from ship leasing, considering that it does not transfer any management responsibilities.
Based on the above, it is clear that this agreement was created by individuals who lack basic maritime knowledge. Therefore, we appeal for a reassessment of the actions of the Ministry of Maritime Affairs, and for the Government to involve legal experts in the process to ensure the protection of the country’s maritime interests.”
This letter outlines concerns regarding the proposed business arrangements, including the potential mismanagement of state assets, the need for legal oversight, and discrepancies between the draft agreement and the information previously approved by the Government.
