Against the backdrop of a turbulent legal landscape, Krehic Law Office Managing Partner Tarja Krehic underscores the recently ended strikes by commercial court judges and the subsequent impact on court proceedings and business registrations as the hot topics on the docket for Croatia, with women's participation in executive roles as the next big issue.
"Commercial court judges, along with others, have been on strike from January 2024 until February 2, 2024, negotiating for salary increases," Krehic begins. "The lack of updates to basic quotas for the past decade has led to legitimate demands for pay raises, prolonging negotiations and impacting court proceedings." Moreover, she reports that, notably, "commercial registry activities have been on pause, affecting business registrations and applications across Central and Eastern Europe."
Krehic further highlights the significant slowdown in court activities, adding that "hearings had been suspended and commercial proceedings had been halted. While urgent cases like family matters continued to some extent, delays were widespread, with over 50% of family hearings delayed during the first week of strikes," she explains. "The aftermath of last year's strikes saw prolonged delays in court operations, emphasizing the need for a swift resolution this time around."
As for other factors that are influencing legal proceedings and business transactions in Croatia, Krehic points to "political dynamics, including the upcoming European Parliament, National Parliament, and local elections," all of which add further complexity. She highlights the impact on major transactions like privatizations, with "one of the largest state-owned company privatizations facing slowdowns due to the anticipated elections. Despite challenges, certain sectors like energy and alternative energy sources remain active, attracting international investments," she says.
Amidst these challenges, M&A activity has also slowed down somewhat. "M&A activity, particularly in tech start-ups, has been somewhat sluggish compared to previous years," Krehic says. "However, there's notable activity in the SME sector, especially with family-owned businesses, indicating resilience. Additionally, the sale and restructuring of state-owned companies continue, albeit with predominantly European investors involved," she points out.
Finally, focusing on other legislative updates of note, Krehic mentions the implementation of EU Directive (EU) 2022/2381 of the European Parliament and of the Council of 23 November 2022 on improving the gender balance among directors of listed companies (the so-called Women on Boards directive), aimed at enhancing gender diversity in corporate governance. "This directive, expected to impact listed companies, aligns with efforts to improve corporate transparency and inclusion. Moreover, it serves as a step towards Croatia's OECD membership aspirations," she says. "I have to emphasize the importance of promoting women's participation in executive roles, reflecting broader societal shifts. Efforts to include more women in decision-making positions – especially the push for state-owned companies to comply with the same legislation – aim to foster transparency and governance improvements, which are crucial, and would have a knock-on effect for a significant segment of Croatia’s economy," Krehic concludes.
