We have successfully defended interests of ORLEN Lietuva in the claim for damages of over USD 70 million

10.03.2020 We have successfully defended interests of ORLEN Lietuva in the claim for damages of over USD 70 million

TGS Baltic represented the client ORLEN Lietuva before the Court of Appeal of Lithuania in a complex dispute regarding the Belarus company’s Polocktransneft Druzhba (currently, Gomeltransneft Druzhba) claim seeking compensation for damages of over USD 70 million.

The dispute was related to the right of ownership of the technological oil that was in the oil pipeline in the territory of the Republic of Lithuania. After the oil supply by the oil pipeline was stopped back in 2006 and eventually it became apparent that it would not be resumed, therefore in 2014, ORLEN Lietuva used the oil left in the pipeline for its own needs as its property. Polocktransneft Druzhba sought to prove that this oil was its property from the very restoration of Independence of the Republic of Lithuania and the Republic of Belarus. Furthermore, it claimed that even if it could be treated that after the restoration of Independence this oil had become the property of the State of Lithuania, it was allegedly transferred to the Republic of Belarus by an international treaty in 1992.

In this case, the TGS Baltic team dealt with complicated issues regarding the content of legal acts on the restoration of Independence of Lithuania, the legal regime of and the title to the former assets of the USSR, qualification of international agreements according to the 1969 Vienna Convention, the international customary law and the Lithuanian law, res judicata effect of a foreign court judgement in cases examined before Lithuanian courts, etc.

The Court of Appeal of Lithuania has ruled that when the Republic of Lithuania restored its Independence, any and all assets and property physically located in its territory became the national property of the Republic of Lithuania according to acta jure imperii principle (acts of sovereign character, which are subject to sovereign immunity), including technological oil in dispute. Technological oil is an accessory to the oil pipeline, therefore, the issue of its ownership is solved in the same way as of the pipeline itself. The property owned by the State of Lithuania could not be transferred to Polocktransneft Druzhba in any way other than an international agreement. However, the Republic of Lithuania has never entered into such an agreement. The document presented by Polocktransneft Druzhba did not meet the criteria qualifying an international agreement and did not have any legal implications either on the Republic of Lithuania and/or on the respondent.

In this headline-making case, the client ORLEN Lietuva was represented by TGS Baltic litigation team, consisting of Partners Valentinas Mikelėnas and Lina Darulienė and Senior Associates Dovilė Armalytė and Tadas Varapnickas.