Motieka & Audzevičius has successfully represented an independent electricity supplier before the Supreme Court of Lithuania.
The case concerned the method that should be used to determine the amount of the contractual fine. The main issue before the court was to determine whether VAT should be included in the amount of the contractual fine if the parties have agreed that the fine should be proportional with regard to the value of the contract. The case law of Lithuanian courts was unclear regarding this matter. The Supreme Court of Lithuania, following a cassation claim by our lawyers, ruled in favor of the client and explained that the VAT should not be included into the calculation of the fine. The Court stated that a contractual fine is not subject to taxation, because the payment of the fine does not correspond to the supply of goods and services.
This is the first time that case law has been formed regarding this matter.