LITHUANIA Law and Practice Contributed by: Kęstutis Švirinas, Ieva Rimavičienė, Domantė Lunytė and Luka Tamulionytė, Sorainen
tribunal may, upon a party’s request and after notifying the other parties, issue an order for interim measures aimed at securing the enforcement of the claim or preserving relevant evidence. A decision of the arbitral tribunal on interim measures constitutes an enforceable instrument (Article 25 (1) of the Law on Commercial Arbitration). If such decision is not voluntarily complied with, a party may apply to the Vilnius Regional Court for the issuance of a writ of execution in accordance with the procedure established in the Code of Civil Procedure (Article 25 (2) of the Law on Commercial Arbitration). In contrast, preliminary orders are binding on the parties but are not enforceable documents (Article 21 (7) of the Law on Commercial Arbitration). The types of interim relief that may be granted include: • prohibiting a party from performing certain acts or entering into specific transactions; • requiring a party to preserve property relevant to the arbitration or to provide security, such as a monetary deposit, bank guarantee or insurance guarantee; and • requiring a party to preserve evidence that may be material to the arbitration. Such measures may be reconsidered and modified at a later stage of the proceedings. Pursuant to Article 20 (3) of the Law on Commercial Arbitration, a party requesting interim measures must satisfy the following conditions: • The claims appear to be prima facie well-founded; however, this preliminary assessment does not prejudice the arbitral tribunal’s right to reach a dif- ferent conclusion in the final award. • There is a real risk that, in the absence of interim measures, enforcement of the arbitral award may be significantly impeded or rendered impossible. • The requested measures are economical and pro- portionate to the objective pursued. 5.2 Role of Domestic Courts In the context of granting interim measures, national courts may intervene in two scenarios:
• When proceedings are pending before the VCCA and interim relief is sought from a national court rather than the arbitral tribunal – either because the tribunal has not yet been constituted or because the requested measures would affect third parties (eg, a request to freeze a bank account). • When proceedings are pending before a foreign arbitral tribunal and interim measures are sought from a Lithuanian court, for instance, where only a Lithuanian court has jurisdiction to impose measures over assets located in Lithuania, such as freezing real estate, or when the assets are in Lithuania. To date, Lithuanian courts have not developed case law on granting interim measures in investment arbi- tration cases. This is largely due to the specific nature of such disputes, where the respondent is the state. Under Lithuanian law and case law, the imposition of interim measures requires, among other things, a demonstration that there is a real risk to the enforce- ment of the arbitral award (eg, the respondent is unlawfully disposing of assets or acting in bad faith). However, such conduct is generally not expected from a state, and funds for satisfying claims arising from judicial or arbitral proceedings are allocated from the state budget. In principle, interim measures could be applied against the state – for example, a prohibition on the transfer of specific real estate – if the dispute concerns that particular property. However, no such precedent has yet been established in Lithuanian case law. 5.3 Security for Costs The Law on Commercial Arbitration regulates secu- rity for costs within the framework of interim relief. In particular, it allows arbitral tribunals to order a party to provide a monetary deposit, bank or insurance guar- antee as an interim measure, which serves the func- tion of securing costs. Security for arbitration costs is specifically addressed in the VCCA Rules. Under Article 341, in exceptional circumstances, the arbitral tribunal may, upon request and after hearing the parties, order a party to pro- vide security for arbitration costs in a form it deems appropriate.
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