Arbitration clause dispute before the Supreme Court

Motieka & Audzevičius represented a client before the Supreme Court in a dispute regarding an arbitration clause in the shareholders agreement. The shareholders of the client’s company submitted a claim in a national court against the client, even though the shareholders’ agreement contained an arbitration clause. The claimants stated that the arbitration clause was vague and unclear, because it did not specify the composition of the arbitral tribunal, as well as the arbitral procedure. According to the claimants, this means that the arbitration clause is unenforceable and the case should be heard in a national court. The Supreme Court of Lithuania ruled in favour of the client and supported our arguments in that an arbitration clause which does not contain such specifics as the composition of the tribunal or the procedure is not unenforceable and therefore the claim cannot be examined in a national court.

The ruling of the Supreme Court of Lithuania has not only protected the client from an illegitimate court process, but it has also contributed to the case law of the Supreme Court of Lithuania regarding the validity of an arbitration clause. In this case, the Court established a precedent that an arbitration clause cannot be considered invalid on the grounds that it does not contain a detailed outline of the arbitration procedure, such as the composition of the arbitral tribunal or the rules of the procedure, in so much as these problems can be solved using the Law on Commercial Arbitration.

 

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