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International Arbitration Forum

Belaruskali JSC v. Lithuania

Case summary

At a glance

Parties
Open Joint Stock Company "Belaruskali" (Belarus) v. the Republic of Lithuania
Case no.
PCA Case No. 2024-03
Forum and rules
UNCITRAL Arbitration Rules 1976; Permanent Court of Arbitration as Registry; Swiss-seated (Swiss Private International Law Act applies as lex arbitri)
Treaty
Agreement between the Government of the Republic of Belarus and the Government of the Republic of Lithuania on the Promotion and Protection of Investments (Belarus–Lithuania BIT), Article 8
Tribunal
Professor Gabrielle Kaufmann-Kohler (Presiding Arbitrator), Professor Azzedine Kettani, Professor Zachary Douglas KC (Sir Daniel Bethlehem KCMG KC is named in Procedural Order No. 1 of 16 February 2024)
Sector
Potash fertilizers; transit; sanctions
Outcome
Pending. The published documents are procedural only: Lithuania's request to terminate for non-payment of the deposit was denied, the case was suspended and then resumed, and a transparency regime was adopted.
Amount
Advance on costs: EUR 300,000 requested from each Party. Amounts claimed are not stated in the published documents.

The dispute

Belaruskali, a Belarusian company, brought a claim against Lithuania under the Belarus–Lithuania BIT and the 1976 UNCITRAL Rules by a Notice of Arbitration of 17 October 2023. The published orders do not set out the claims in detail. The record refers to Lithuania's decision to terminate the transit of potash fertilizers and to sanctions on Belarusian potash, which were the subject of public debate and statements by United Nations bodies. Lithuania stressed the national security sensitivities of the case. Belaruskali's assets were frozen under EU, US, UK, Swiss, Canadian, Ukrainian and other sanctions regimes, and it needed a licence from the Dutch Ministry of Finance to pay its share of the advance on costs.

Key holdings

  1. Article 41(4) of the 1976 UNCITRAL Rules does not justify terminating the proceedings where a party claims, on plausible grounds, that it is temporarily unable to pay the deposit and makes all reasonable efforts to overcome this soon. Belaruskali had raised its sanctions licensing problem proactively and kept the Tribunal informed, so Lithuania's request for termination was denied. The Tribunal distinguished Centurion v. Canada, where the claimants had shown no intention to pay. Procedural Order No. 3, ¶¶ 4.5–4.10
  2. An indefinite suspension would be inappropriate, because the Parties have a legitimate interest in timely resolution and the Tribunal has a duty of efficiency. The Tribunal suspended the proceedings until 30 August 2024. Time limits falling due during the suspension were deferred by 70 days, and the Claimant had to report by 24 August 2024 if it still could not pay. Procedural Order No. 3, ¶¶ 4.13–4.15, 5.2
  3. After the PCA received Belaruskali's deposit on 16 August 2024, the arbitration was resumed as of 2 September 2024 under a revised calendar. Belaruskali had obtained extensions for its Statement of Claim to 2 December 2024. Over its objection, the Tribunal held it fair to give Lithuania additional time for its Statement of Defence. Procedural Order No. 4, ¶¶ 1.4–1.7 and Order
  4. Neither the BIT nor the Swiss PILA addresses transparency. Where the Parties have not agreed, the Tribunal decides under Article 182(2) PILA. Relying on the trend towards transparency in investment arbitration and the public interest in the measures at issue, but balancing the Parties' confidentiality interests, the Tribunal adopted a tailored regime. Procedural Order No. 5, ¶¶ 1.12–1.21
  5. Under that regime, decisions, awards and procedural orders are published on the PCA website subject to redaction of Protected Information. Written submissions, hearing access and transcripts become public only if the Parties agree. Exhibits, witness statements and expert reports remain confidential unless the Parties agree otherwise. Procedural Order No. 5, Annex I
  6. Each Party must disclose any third-party funder, including the persons who own and control a funder that is a juridical person. The Tribunal recommended a limit of 20 document requests per Party and may take guidance from the 2020 IBA Rules. Procedural Order No. 1, §§ 4.1, 4.6, 11

Procedural history

  1. 17 October 2023Notice of Arbitration filed by Belaruskali.
  2. 8 February 2024Procedural conference. Belaruskali explained that it needed a licence to pay the PCA, and transparency was discussed.
  3. 16 February 2024Procedural Order No. 1 sets the procedural rules and calendar.
  4. 20 February 2024The Tribunal requests an advance on costs of EUR 300,000 from each Party by 22 April 2024. Lithuania pays; Belaruskali does not pay by the deadline.
  5. 24 June 2024Procedural Order No. 3 denies Lithuania's request for termination and suspends the arbitration until 30 August 2024.
  6. 16 August 2024The PCA confirms receipt of Belaruskali's share of the deposit.
  7. 16 September 2024The PCA publishes a press release and website entry on the arbitration.
  8. 19 September 2024Procedural Order No. 4 resumes the arbitration as of 2 September 2024 and adopts a revised calendar, with the hearing set for 9–12 November 2026.
  9. 16 October 2024Procedural Order No. 5 adopts transparency and confidentiality rules.
  10. 21 January 2025Further PCA press release (text not included among the published documents summarised here).

Tribunal, counsel and experts

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Keywords

Summary generated with AI from the published documents — refer to the award for the authoritative text.

Case ID
PCA Case No. 2024-03
Country
Treaty
Belarus - Lithuania BIT (1999)