LITHUANIA Law and Practice Contributed by: Kęstutis Švirinas, Ieva Rimavičienė, Domantė Lunytė and Luka Tamulionytė, Sorainen
tribunal, or the tribunal’s application of procedural or substantive law. Instead, the court confines itself to a prima facie review aimed at determining whether enforcement of the award would clearly and unam- biguously violate fundamental mandatory legal norms or principles of paramount importance to the state and society, recognised at both the national and inter- national levels. The public policy exception may there- fore be applied only where the violation is manifest and affects values of the highest significance. Since both EU and international law form an integral part of the Lithuanian legal system, a breach of public policy encompasses not only violations of Lithuanian fundamental legal principles but also those of EU and international law. With regard to sovereign immunity, Lithuanian courts, consistent with general principles of international law, recognise the immunity of states from jurisdiction and execution. However, exceptions apply where a state has expressly waived its immunity or where immunity does not extend to assets of a commercial nature. Recovery against state assets is therefore limited to property not designated for sovereign or public pur- poses, aligning Lithuanian practice with the restrictive doctrine of state immunity prevailing in international law. 9.3 Asset Tracing and Recovery In Lithuania, enforcement of judgments and arbitral awards is carried out by bailiffs, who are vested with the authority to access various state registers in order to obtain information regarding the property owned by the debtor. Accordingly, information concerning state- owned assets may be identified through such regis- ters. Where relevant information is held abroad, the competent authorities of the respective foreign state may be approached through the appropriate channels of legal assistance or co-operation.
Instances in Lithuania where recognition and enforce- ment of a judicial decision against a state are sought are relatively rare. Nonetheless, Lithuanian practice includes a notable case that subsequently gave rise to an investment dispute against Lithuania. A Cypriot company successfully enforced in the Republic of Lithuania an international arbitration award rendered in 2004 by the London Court of Inter- national Arbitration (LCIA) against the Russian Federa- tion (Kaliningrad Region). The subject of enforcement comprised two buildings owned by the Kaliningrad Region in Lithuania. In 2006, the authorities of the Kaliningrad Region initi- ated ICC arbitration proceedings against the Republic of Lithuania, invoking the Lithuania–Russia BIT. The claim asserted that the Republic of Lithuania was obliged to compensate the Kaliningrad Region for losses allegedly arising from expropriation carried out in the course of implementing the LCIA award. Accordingly, Lithuanian courts, by recognising and permitting the enforcement of the LCIA award – including the sale at auction of a building in Vilnius belonging to the Kaliningrad Region and the mov- able property contained therein – acted lawfully and without breaching the principle of state sovereignty. Therefore, Lithuanian courts have demonstrated a generally favourable approach towards international arbitration. With respect to the doctrine of piercing the corpo- rate veil, Lithuanian courts have not developed case law addressing its application in the context of state assets. As a result, there is no domestic judicial prac- tice extending enforcement against state-owned enterprises or entities by disregarding their separate legal personality.
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