AB „Rusijos eksporto kreditų ir investicijų draudimo agentūra“ v. UAB „Livila“

At a glance

Parties

AB „Rusijos eksporto kreditų ir investicijų draudimo agentūra“ (AB „Exiar“), applicant, v. UAB „Livila“, interested party

Case no.

Court of Appeal of Lithuania, civil case No. 2T-64-381/2019 (court process No. 2-60-3-00052-2019-0)

Forum and rules

Recognition and enforcement under the 1958 New York Convention, the Lithuanian Code of Civil Procedure and the Law on Commercial Arbitration

Court

Court of Appeal of Lithuania, Civil Division: Artūras Driukas (presiding and rapporteur), Aldona Tilindienė, Jūratė Varanauskaitė

Underlying award(s)

Award of 31 July 2018 of the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation, case No. M-199/2017, approving the parties' settlement agreement of 10 July 2018

Sector

Export credit insurance; agricultural machinery distribution

Outcome

The award was recognised and declared enforceable in Lithuania (17 September 2019).

Amount

Settlement approved by the award: EUR 150,000 plus RUB 651,577.85 in costs. Originally claimed in the arbitration: EUR 184,298.62 debt, EUR 6,450.45 late-payment interest and costs in roubles.

The dispute

UAB „Livila“, a Lithuanian company, distributed combine harvesters made by the Russian company RAB „Rostselmash“ under a contract of 22 October 2014. Livila refused to pay EUR 268,993.36 for goods delivered. It said Rostselmash had cut supplies without reason and appointed another distributor, causing it EUR 793,219 in losses. Rostselmash's export credit insurer, AB „Exiar“, paid out on the policy, took over the claim and brought arbitration in Moscow. The parties settled on 10 July 2018 and the arbitral court approved the settlement in its award of 31 July 2018. When Livila did not pay, Exiar applied to the Court of Appeal of Lithuania for recognition and enforcement. Livila objected on three grounds: enforcement would breach public policy because no insured event had occurred; the case should be heard orally; and the Lithuanian translations were not signed by the translator.

Key holdings

1. Oral hearing refused. Applications to recognise foreign awards are heard in writing by a panel of three judges under Article 811(1) of the Code of Civil Procedure, and nothing in the case justified departing from that rule. ¶ 5
2. The grounds for refusal in Article V of the New York Convention are exhaustive. The court does not review the merits of the award. Livila relied on none of the Article V(1) grounds, so the court examined only the Article V(2) grounds, which it must check of its own motion. ¶¶ 8–10
3. Arbitrability (Article V(2)(a)). The dispute concerned an insurer's right to recover sums it had paid out from the party responsible for the loss. It was a dispute between private legal entities and does not fall within the non-arbitrable categories of Article 12(2) of the Law on Commercial Arbitration. ¶ 11
4. No breach of public policy (Article V(2)(b)). Public policy means international public policy and is construed very narrowly. The arbitral court had checked that the settlement was lawful, Livila did not deny that it had concluded the settlement, and there was no sign of coercion, fraud or threats. Livila's view that Exiar should not have paid the insurance, and its disappointed hopes of compensation and of renewed cooperation with Rostselmash, do not make the award contrary to public policy. ¶¶ 13–17
5. Translations accepted. The translator did not sign the translations, but a Moscow notary certified the translator's signature. Livila also did not identify any passage it said was mistranslated. ¶ 18
6. The award was recognised and enforcement in Lithuania was permitted. The applicant's written objections dated 10 September 2019 arrived after the examination of the case had closed; they were not accepted and were returned. The ruling took effect on adoption and could be appealed in cassation to the Supreme Court of Lithuania within 30 days. ¶¶ 19–20; operative part

Procedural history

1. 22 October 2014Livila and Rostselmash conclude the contract under which the unpaid goods were supplied.
2. 10 July 2018Exiar and Livila sign a settlement agreement: EUR 150,000 plus RUB 651,577.85 in costs, with Exiar waiving its other claims.
3. 31 July 2018The International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation approves the settlement by an award in case No. M-199/2017.
4. 17 September 2019The Court of Appeal of Lithuania recognises the award and declares it enforceable in Lithuania.

Tribunal, counsel and experts

Decided by

• Artūras Driukas Judge, Court of Appeal of Lithuania (presiding judge and rapporteur)
• Aldona Tilindienė Judge, Court of Appeal of Lithuania
• Jūratė Varanauskaitė Judge, Court of Appeal of Lithuania

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Keywords

• New York Convention
• recognition and enforcement
• public policy
• Article V(2)(b)
• arbitrability
• award on agreed terms
• settlement agreement
• export credit insurance
• subrogation
• Exiar
• Rostselmash
• combine harvesters
• ICAC Russia
• translation requirements
• Lithuania

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