LITHUANIA Trends and Developments Contributed by: Kęstutis Švirinas, Ieva Rimavičienė, Domantė Lunytė and Luka Tamulionytė, Sorainen
While it may be premature to declare this a systemic trend, the anti-arbitration injunction sends a clear and dangerous signal to Western investors. Following the invasion of Ukraine on 24 February 2022 and the imposition of international sanctions, Russia’s list of “unfriendly” countries has expanded to include approximately 50 countries, including all G7 members and all 27 EU member states. As a result, nearly all Western investors are now exposed to the risk of simi- lar injunctions, solely based on their nationality or the location of the arbitration institution. Conclusion: what lies ahead? Lithuania’s investment dispute landscape is undergo- ing a profound transformation. The termination of BITs with Russia and Belarus marks a decisive shift away from traditional treaty-based protections. However, sunset clauses ensure that legal disputes will con- tinue well into the next decade, maintaining a residual framework for investor claims. These cases are likely to be shaped not only by his- torical economic ties and geographic proximity but also by the evolving geopolitical climate and EU sanc- tions policy.
The EU has responded proactively, introducing tar- geted sanctions that directly address investment arbitration, aiming to shield EU member states from politically motivated or abusive claims. At the same time, Russia’s retaliatory legal tactics – such as anti-arbitration injunctions and the weap- onisation of domestic courts – signal a growing risk for Western investors. While Lithuanian investors may technically retain access to dispute resolution mechanisms, the practical enforceability of awards is increasingly uncertain. Arbitration may become less a tool for legal remedy and more a symbolic assertion of rights, with limited prospects for actual recovery. For investors, understanding a shifting legal terrain where investment disputes are no longer purely legal matters but deeply intertwined with foreign policy, national security and international relations is essen- tial. Strategic foresight, risk mitigation and co-ordi- nated EU-level responses will be critical to navigating the next decade of investment protection and dispute settlement.
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