UAB “LATAKKO” v. UAB “Rijatransa”, M. J.

At a glance

Parties

UAB "LATAKKO" (applicant) v. UAB "Rijatransa" and M. J. (interested persons)

Case no.

Court of Appeal of Lithuania, civil case No. e2T-97-370/2018

Court

Lietuvos apeliacinis teismas (Court of Appeal of Lithuania), Civil Division: Artūras Driukas, Danguolė Martinavičienė (presiding and rapporteur), Egidijus Žironas

Underlying award(s)

Award of the Riga Arbitration Court (Republic of Latvia) of 24 August 2018, case No. 70/06-2018

Treaty

New York Convention 1958 (Article V)

Sector

Sale of goods; suretyship

Outcome

The Latvian award was recognised and declared enforceable in Lithuania (4 December 2018).

Amount

Award enforced: EUR 4,656.57 in total, payable jointly and severally (EUR 1,695.12 principal debt, EUR 1,425.04 for late payment, EUR 40 debt-collection fee, EUR 1,000 legal services, EUR 496.41 arbitration costs). Translation costs: EUR 198 awarded (EUR 99 from each interested person); EUR 10 refused.

The dispute

UAB "LATAKKO" and UAB "Rijatransa" signed purchase contract No. 1005-2015/VM on 20 January 2015, with an arbitration clause in point 7.5. On 18 March 2015 M. J. signed suretyship contract No. 005-2015/VM, which contained the same arbitration clause. Under it, M. J. guaranteed Rijatransa's obligations. LATAKKO sued both for unpaid debt before the Riga Arbitration Court in Latvia. On 24 August 2018 that court ordered them, jointly and severally, to pay EUR 4,656.57; the respondents did not appear at the hearing. LATAKKO then applied to the Court of Appeal of Lithuania for recognition and enforcement under the New York Convention. In its response, Rijatransa, represented by its director M. J., accepted the debt but said it had been paid on 19 June 2018. It also asked the court to cancel EUR 64.96 in penalty interest, which it said was not supported by evidence. It relied on none of the Article V grounds.

Key holdings

1. Recognition proceedings only check whether a ground under Article V of the New York Convention exists; the court cannot review whether the award is lawful or well founded. The party resisting enforcement must prove the Article V(1) grounds, while the court must examine the Article V(2) grounds of its own motion. ¶¶ 6, 9
2. The dispute was arbitrable. Under Lithuanian law, a claim for debt arising from a purchase contract and a suretyship between private persons can be decided by arbitration, so Article V(2)(a) does not apply. ¶ 11
3. Enforcement does not breach public policy. The interested persons did not argue lack of notice under Article V(1)(b). The award and the applicant's evidence showed that the respondents were notified of the hearing and did not attend, so their right to a fair hearing was not restricted. ¶ 12
4. The claim that the debt was already paid and the objection to the penalty interest do not affect recognition, because the court cannot re-examine the merits. Whether payment was made can be decided in enforcement proceedings before a bailiff. ¶ 13
5. Translation costs are recoverable litigation costs, because documents must be filed in Lithuanian. The court awarded EUR 198, split equally between the two interested persons. It refused EUR 10 because the evidence did not show that this cost was incurred for this case. ¶¶ 15–16

Procedural history

1. 20 January 2015Purchase contract No. 1005-2015/VM, with an arbitration clause, concluded between LATAKKO and Rijatransa.
2. 18 March 2015Suretyship contract No. 005-2015/VM signed by M. J.
3. 24 August 2018Riga Arbitration Court award in case No. 70/06-2018 orders the respondents to pay EUR 4,656.57.
4. 24 September 2018LATAKKO applies to the Court of Appeal of Lithuania for recognition and enforcement.
5. 1 October 2018Court accepts the application for examination in written proceedings.
6. 30 October 2018Hearing postponed to 4 December 2018 because documents had not been served on M. J.
7. 4 December 2018Court of Appeal recognises the award and declares it enforceable in Lithuania.

Tribunal, counsel and experts

Decided by

• Danguolė Martinavičienė Judge, Court of Appeal of Lithuania (presiding judge and rapporteur)
• Artūras Driukas Judge, Court of Appeal of Lithuania
• Egidijus Žironas Judge, Court of Appeal of Lithuania

For the respondent

UAB "Rijatransa" (director)

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Keywords

• New York Convention
• recognition and enforcement
• Article V(2)(b)
• public policy
• Article V(1)(b)
• notice of arbitration
• arbitrability
• Riga Arbitration Court
• Latvia
• Lithuania
• suretyship
• debt recovery
• no review of merits
• payment defence
• translation costs
• default of respondent

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