Lithuania / 14 April 2008 / Lithuania, Lietuvos Apeliacinis Teismas (Court of Appeal of Lithuania) / SIA ,,Tered Rail & Logistics“ v. OOO ,,Trans Sibirskij Ekspress Servis“ / 2T-11/2008
| Country | Lithuania |
| Court | Lithuania, Lietuvos Apeliacinis Teismas (Court of Appeal of Lithuania) |
| Date | 14 April 2008 |
| Parties | SIA ,,Tered Rail & Logistics“ v. OOO ,,Trans Sibirskij Ekspress Servis“ |
| Case number | 2T-11/2008 |
| Applicable NYC Provisions | V | V(2) | V(2)(b) |
| Source |
https://www.apeliacinis.lt (website of the Court of Appeal of Lithuania) |
| Summary | SIA ,,Tered Rail & Logistics“ (“Tered”) entered into a contract with OOO ,,Trans Sibirskij Ekspress Servis“ (“Trans”), which contained an arbitration clause. A dispute arose and Tered initiated arbitration proceedings against Trans, obtaining a favorable award, which it sought to have recognized and enforced in Lithuania before the Lietuvos Apeliacinis Teismas (the Court of Appeals of Lithuania). Trans objected to the enforcement on the basis of Article V(2)(b) NYC, arguing that the arbitral award was contrary to Lithuanian public policy because the arbitral tribunal had awarded damages under a penalty provision in the contract for termination of the contract, which imposed a very high penalty, equivalent to one third of the total contract price. The Lietuvos Apeliacinis Teismas granted recognition and enforcement of the award, finding that the award did not violate Lithuanian public policy under Article V(2)(b) NYC. It held that even though the amount of the penalty was high, the parties had consented to the provision, and that the amount was proportionate to the value of the agreement. |
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