Arbitration in Lithuania: a guide for international companies

In today’s interconnected global economy, legal disputes are inevitable. But how they are resolved makes all the difference. Traditional courts can be slow, costly, and public, which is why many international companies turn to arbitration – a faster, confidential, and widely enforceable process conducted outside the courtroom. Especially effective in commercial arbitration, it offers greater flexibility and privacy.

Supported by a modern international legal framework, progressive arbitration law, and a business-friendly judiciary, Lithuania is one of Europe’s top destinations for commercial arbitration. With trusted institutions, multilingual professionals, and global legal alignment, it offers a strategic and efficient environment for dispute resolution.

What is arbitration?

Arbitration is a private and legally binding process in which a dispute is resolved outside of national courts by one or more (usually three) impartial and independent arbitrators. It is widely used in international business due to its confidentiality, flexibility, and enforceability. In commercial arbitration, parties agree — usually by including an arbitration clause in a contract – that disputes will be resolved through arbitration rather than litigation.

In Lithuania, the process is governed by the Republic of Lithuania Law on Commercial Arbitration, which mirrors the 2006 UNCITRAL Model Law principles. This legal alignment ensures predictability and consistency with global arbitration practices.

Why choose arbitration in Lithuania?

Lithuania offers significant advantages for international companies seeking a reliable, business-friendly environment for resolving disputes. Its legal system supports arbitration at every level — from clearly defined laws to arbitration-friendly courts — making it one of the most attractive jurisdictions for commercial arbitration in the Baltic region.

Key reasons to choose arbitration in Lithuania:

• Modern arbitration law: Lithuania’s Law on commercial arbitration ensures transparency, neutrality, and party autonomy, closely following international arbitration standards and best practices.
• EU and New York Convention member: arbitral awards issued in Lithuania are enforceable in more than 160 countries.
• Multilingual and experienced professionals: arbitrators, legal experts, and institutions in Lithuania often work in English, making proceedings accessible for foreign businesses.
• Efficient and supportive judiciary: Lithuanian courts assist in arbitration without unnecessary interference, especially in enforcing arbitral awards or granting interim measures. Only a few arbitral awards have been successfully challenged, and for a reason when the court established a severe breach of the fundamental procedural principles during the arbitration.
• Specific industrial knowledge: Under Lithuanian law, arbitrators do not necessarily need to be lawyers. Anyone with the necessary knowledge, such as an accountant or engineer, can be an arbitrator.
• Competitive costs: compared to many Western European jurisdictions, Lithuania offers high-quality arbitration services at very accessible rates.

Choosing arbitration in Lithuania means gaining a strategic legal partner in the region — one that values neutrality, speed, and international enforceability.

Arbitration Institutions in Lithuania

Lithuania supports both institutional and ad hoc arbitration, giving businesses the flexibility to choose the approach that best suits their dispute.

Vilnius Court of Commercial Arbitration (VCCA)

The Vilnius Court of Commercial Arbitration (VCCA) is Lithuania’s primary arbitration institution, administering both domestic and international disputes. Known for its impartiality and efficiency, VCCA offers:

• Transparent fee schedules.
• Model arbitration clauses.
• Bilingual or English-language proceedings.
• Remote and hybrid hearing options.
• A pool of arbitrators with regional and global experience.

The VCCA is well-suited for complex commercial arbitration cases and provides a stable procedural framework, aligned with Lithuania’s commercial arbitration law, that international companies can rely on.

Ad hoc arbitration

Lithuanian arbitration law also permits ad hoc arbitration, where the parties themselves organize proceedings without institutional administration. This option provides maximum flexibility in selecting arbitrators and procedures, commonly applying Uthe NCITRAL Arbitration Rules.

Steps in the arbitration process

Understanding the arbitration process helps companies prepare better and set realistic expectations. In Lithuania, the process typically includes the following stages.

Arbitration Agreement

Disputes can only be resolved through arbitration if there’s a valid arbitration clause or agreement. Ideally, this is included in the original commercial contract and should specify:

• seat of arbitration (e.g., Vilnius);
• governing law, including specifically to the arbitration clause;
• number of arbitrators;
• language of proceedings.

Well-drafted clauses not only reduce risks but also streamline the entire resolution process. Our arbitration lawyers can help you draft or review clauses that align with Lithuanian and international standards. It is especially important to align the arbitration clauses in the chain of contracts or specific industries, such as construction or the insurance business.

Notice and Claim Submission

The claimant initiates arbitration by submitting a notice of arbitration and appointing an arbitrator. The respondent then replies and appoints its arbitrator (if a three-member tribunal is agreed).

Hearings and Proceedings

Hearings may be held in-person, remotely, or in hybrid form. The tribunal hears arguments, examines witnesses, and reviews evidence. Unlike court, commercial arbitration allows greater flexibility in procedure and scheduling.

Arbitral Award

The tribunal issues a binding arbitral award, concluding the case. Under the Republic of Lithuania Law on Commercial Arbitration, the award has the same enforceability as a court decision, provided it meets minimal legal standards.

Costs & duration

One of Lithuania’s strongest advantages is its ability to offer high-quality arbitration services at competitive costs. On average, the duration of arbitration proceedings ranges from 6 to 18 months, depending on the complexity of the dispute, while total costs typically fall between €10,000 and €250,000 or more, including arbitrators’ fees and legal expenses. Proceedings are conducted in Lithuanian or English, with English being the preferred language in most international commercial arbitration cases.

These costs vary based on several factors, such as the number of arbitrators, procedural steps, and the length of hearings. Institutions like the VCCA maintain transparent fee schedules to help businesses plan ahead. At motieka.com, we take it a step further by providing clear, upfront budgeting and cost control from the very beginning, ensuring predictability, transparency, and peace of mind for our clients.

Enforceability (New York Convention)

A major reason why businesses choose arbitration is the enforceability of arbitral awards across borders.

Lithuania is a signatory to the 1958 New York Convention, which allows arbitral awards issued in Lithuania to be recognized and enforced in over 160 countries. Likewise, foreign arbitral awards are enforceable in Lithuania — unless they violate fundamental public policy.

Local courts, governed by the Law on Commercial Arbitration, play a limited but supportive role in enforcement. Their efficiency and neutrality further strengthen Lithuania’s reputation as a safe seat for international commercial arbitration.

FAQ

Can foreign companies use arbitration in Lithuania?

Yes. Lithuania’s arbitration law provides equal standing to both foreign and domestic parties.

Do I need a company registered in Lithuania?

No. You only need a valid arbitration clause selecting Lithuania as the seat. This can be included in any international contract.

Are arbitration proceedings confidential?

Yes. The VCCA rules and national legislation protect confidentiality. Neither the dispute nor the final award is made public unless both parties agree.

Can I use English as the language of proceedings?

Absolutely. Especially in commercial arbitration, English is commonly used for international cases.

Who should I contact for legal advice?

Our dedicated arbitration lawyers are ready to assist with clause drafting, representation, enforcement, and strategic counsel throughout the entire process.