LITHUANIA Law and Practice Contributed by: Kęstutis Švirinas, Ieva Rimavičienė, Domantė Lunytė and Luka Tamulionytė, Sorainen
9. Enforcement of Awards 9.1 Enforcement Procedure Enforcement of Arbitral Awards in Lithuania In Lithuania, arbitral awards rendered by domestic tri- bunals – such as the VCCA – are considered enforce- able instruments. If not voluntarily complied with, the prevailing party may apply to the competent district court under the Code of Civil Procedure, which will issue a writ of execution. This writ must then be sub- mitted to a bailiff for enforcement. For foreign arbitral awards, the procedure of recog- nition of foreign arbitral awards is regulated by the New York Convention, the Code of Civil Procedure and the Law on the Commercial Arbitration. The appli- cant must submit to the Court of Appeal of Lithuania: • the original or certified copy of the arbitral award; • the arbitration agreement; and • certified translations of both documents into Lithu- anian. As a party to the New York Convention, Lithuania observes the grounds for refusal of recognition and enforcement of arbitral awards established therein. Accordingly, a party opposing the recognition of an award (under the New York Convention) or seeking to set aside an award (pursuant to the Law on Com- mercial Arbitration) bears the burden of proving one or more of the following: • invalidity of the arbitration agreement; • breach of due process; • ultra petita (award beyond the scope of the arbitra- tion); • procedural irregularities; • existence of a set-aside award; • lack of arbitrability; • violation of public policy. Upon recognition, the Court of Appeal issues a writ of execution, which may be enforced through a bailiff. Awards Set Aside at the Seat of Arbitration Lithuanian courts adopt a discretionary approach when dealing with arbitral awards that have been annulled at the seat of arbitration. Although Article V(1)
• fees and reasonable expenses incurred by arbitra- tors; • reasonable expenses incurred by the permanent arbitral institution or other parties, as stipulated by agreement; and • reasonable expenses incurred by the parties them- selves in connection with the arbitration process. The principle commonly applied in cost allocation is “costs follow the event”, whereby the unsuccessful party is typically required to reimburse the successful party for its arbitration-related expenses. However, the arbitral tribunal retains discretion in determining cost allocation. Where a party’s claims are only partially upheld, the tribunal may proportion- ally reduce the awarded costs. In cases where both parties are partially successful, or where specific cir- cumstances justify it, the tribunal may decide that each party shall bear its own costs. Interest may also be awarded, typically in accordance with the applicable substantive law or the parties’ agreement. It is often calculated from the date the claim arose until the date of payment. 8.4 Mitigation of Damages Whether an investor has a duty to mitigate losses depends on the applicable law. Under Lithuanian law, the Civil Code does not explicitly impose a duty on the creditor to mitigate losses. However, Article 6.259 (2) provides that the debtor’s liability may be reduced if the creditor intentionally or negligently contributed to the losses or failed to take measures to reduce them. The Supreme Court has confirmed that this applies to both actual losses and liquidated damages, and that the creditor’s conduct is assessed when determining the scope of recoverable losses. If the creditor fails to act reasonably to limit the damage, the compensation may be reduced accordingly. In practice, this means that while the duty to mitigate is not explicitly stated, it is implicitly required under the principles of fairness, reasonableness and good faith, which underpin Lithuanian civil law. Both parties to a dispute are expected to act in a manner that avoids unnecessary harm and promotes equitable outcomes.
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