Not showing regional utf characters

HTML mail shows Newsletter perfectly but i have problem, in the from field of received message, special UTF character (ščćđž) are shown garbaged, and this even prevents showing sender Name in next Outlook dialog.
Gmail renders this OK.
Also, some modules (like webform) renders the form field perfectly.
Using Mimemail for sitewide mail renderer sends body ok but from field is even more garbaged.

I wonder do i have some control in code to adjust this.