LITHUANIA Law and Practice Contributed by: Kęstutis Švirinas, Ieva Rimavičienė, Domantė Lunytė and Luka Tamulionytė, Sorainen
2.6 Arbitration Clauses in Investor–State Contracts Contracts between Lithuania and foreign investors are not publicly accessible, which makes it difficult to determine whether direct arbitration clauses are com- monly used or how investment protection provisions differ from those found in BITs. However, it is clear that an investor and a state may agree on additional rules to those provided in investment treaties to help the investor to secure its investment.
culture, science, healthcare and social protection) or fulfilling state functions. • Investor rights: Article 5 guarantees equal treat- ment for Lithuanian and foreign investors. It affirms that investors’ rights and legitimate interests are protected under Lithuanian law, and that investors are entitled to manage, use and dispose of their investment objects, as well as to receive income from them. • Strategic investors: Article 2 (5) provides for special arrangements applicable to strategic investors entering into agreements with the Government of Lithuania, allowing for tailored investment terms and conditions. • State Investment Programme: Articles 12–15 set out Lithuania’s strategic investment priorities and establish mechanisms for financing and implemen- tation through the State Investment Programme. Key Dispute Resolution Provisions • Domestic and international forums: Article 6 (2) provides that disputes concerning the infringement of investor rights and legitimate interests may be resolved in accordance with Lithuanian law, includ- ing through domestic courts, international arbitra- tion or other agreed-upon mechanisms. • Access to international arbitration: Article 6 (3) explicitly states that investment disputes shall also be resolved in accordance with international agree- ments. Foreign investors are granted the right to submit disputes directly to international arbitration institutions, including the ICSID. Interaction With Investment Treaties The Law on Investment operates in conjunction with Lithuania’s international obligations under bilateral and multilateral investment treaties. These treaties typical- ly provide additional protections – such as guarantees of FET, protection against expropriation, and access to investor–state dispute settlement mechanisms. The national law expressly recognises the applicability of international agreements in resolving investment dis- putes, thereby reinforcing Lithuania’s commitment to international investment standards and ensuring coherence between domestic and treaty-based pro- tections.
3. Substantive Protections and Breaches 3.1 Common Complaints
In the Lithuanian context, investor–state arbitration complaints most frequently revolve around allega- tions of direct and indirect expropriation, breach of the FET standard and the minimum standard of treatment (including denial of justice), violation of full protection and security, and breaches of national treatment and most-favoured nation treatment. Investors have also raised claims of arbitrary, unreasonable or discrimina- tory measures. These grounds have been central to several high-pro- file disputes involving Lithuania. For example: • In Gazprom v Lithuania, the investor alleged expro- priation and discriminatory treatment in connection with the forced divestment of its stake in Lietuvos Dujos following EU-mandated gas sector reforms. • In Veolia v Lithuania , claims were raised concern- ing discriminatory regulation and unfair treatment of Vilniaus Energija, a heat supplier controlled by Veolia. • Russian Fund v Lithuania involved allegations of unlawful nationalisation of a bank. • In Roščins v Lithuania , the investor claimed misap- propriation of funds from bank accounts, raising concerns over denial of justice and lack of due process. • Belaruskali JSC v Lithuania concerned the termina- tion of contractual arrangements in the context of international sanctions, with claims of arbitrary and politically motivated conduct.
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