This case is the first in the EU after the Court of Justice admitted in its judgment of 6 March 2018 in Achmea case that the settlement of investment disputes in international arbitration under bilateral investment treaties between EU Member States is not possible. In its ruling, the Supreme Court of Lithuania stated that, after the Republic of Lithuania became a Member State of the EU, the settlement of disputes between investors and the Member State is not possible in arbitration because it is contrary to EU law.
According to Dr. Tadas Varapnickas, attorney at law at TGS Baltic, the interpretation given by the Supreme Court of Lithuania will bring more clarity across the EU. In particular, in cases concerning disputes between investors and the Member States. “After the Court of Justice adopted its famous judgment in 2018 in Achmea case stating that EU law prohibits dispute resolution between investors and Member States in international arbitration, this issue has so far been a subject of much discussion across the EU. Although the Court of Justice has subsequently continued to develop the same case law in a number of other cases, this debate has not stopped. The arguments put forward by the Supreme Court of Lithuania in the case concerning the first practical attempt to transfer claims made in arbitration from the arbitration, which is contrary to EU law, to a national court should contribute to the development of the debate in the EU. This should give more clarity not only to the Lithuanian courts but also to national courts of the whole EU,” said Tadas Varapnickas.
The new case law has been formed by the Supreme Court of Lithuania in deciding on the issue of admission of the statement of claim filed by the State (which is represented by TGS Baltic) against the French energy group Veolia, the Lithuanian company Icor and their related persons, claiming damages of more than EUR 240 million. Following the adoption of this ruling by the Supreme Court of Lithuania, the issue of admission of the statement of claim filed by the State will be further decided in the Vilnius Regional Court, however the argument of the ongoing arbitration process will no longer be able to be invoked.