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Federation of Bosnia and Herzegovina Supreme Court: in favorem validitatis saves ambiguous arbitration clause; fallback to courts not a waiver; prior court proceedings limited (Al‑Shiddi v BN Step)

Published on: 18 December 2025

Published by a LexisNexis Arbitration expert

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Article summary

Al-Shiddi International d.o.o. v BN Step d.o.o. , Case No 65 0 Ps 1012588 25 Rev What are the practical implications of this case?

This decision offers valuable guidance to legal practitioners, particularly within arbitration practice. The central message is a clear judicial preference to read ambiguous arbitration provisions in a manner that preserves their effectiveness. Reflecting the stance of the FBiH Supreme Court, even a loosely formulated arbitration pact should be preserved where the parties’ intention points to arbitration as the chosen forum, and courts ought to prioritise enforceability by giving effect to that intent, especially where the contract reveals a distinct preference for arbitral resolution. In this dispute, the court upheld the clause’s validity and confirmed the jurisdiction of the arbitral process, including the Arbitration Court at the Foreign Trade Chamber of BiH, despite an imprecise reference to arbitration and no explicit mention of that institution. Adopting a liberal construction, and guided by the principle of in favorem validitatis (in favour of validity), the court ensured the agreement to arbitrate remained operable and enforceable...

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