Successfully represented a contractor in a case for the payment of an insurance indemnity

Our Dispute Resolution team represented a contractor in case, in which the plaintiff Alytus Regional Waste Management Center requested to award from the defendant the joint-stock insurance company Gjensidige EUR 781,560.90 in damages and 6% annual procedural interest. In the present case, the dispute between the parties arises mainly as to whether there is a basis for the plaintiff (customer) Alytus Regional Waste Management Center to demand payment of an insurance indemnity in the amount of EUR 781,561.05 according to the surety insurance letter issued by the defendant.

Motieka & Audzevičius’ Dispute Resolution lawyers represented Axis Industries (a contractor), who designed and installed a mechanical biological treatment plant for household waste in Alytus district in 2015. The plaintiff was demanding that the defendant pay 781 561.05 EUR under the surety insurance letter, stated that the contractor Axis Industries had not fulfilled its contractual obligations properly and in a timely manner.

The plaintiff, since the end of the construction of the plant, has repeatedly accused the contractor of improper performance of the contract and therefore demanded that the Gjensidige needs to pay  781 560.90 EUR, in accordance with the unconditional letter of guarantee for the performance of the contractor’s obligations. As a result, other related cases were heard in which the client celebrated the victory, but this did not stop Alytus Regional Waste Management Center from filing a claim with the insurance company.

In preparation for this case, on behalf of the client, our team ensured that the insurance company would withhold payments under the surety insurance letter to the plaintiff until the client proved his rightfulness in the proper performance of the contract. After proving that the client has performed the contract properly in the Lithuanian Court of Appeal, both the Vilnius Regional Court and the Lithuanian Court of Appeal decided that there are no grounds to satisfy the claim of Alytus Regional Waste Management Center for the payment of an insurance indemnity in the amount of EUR 781 561.05.

Successful completion of this case assured to the client will not obliged to pay the insurance company Gjensidige the amount of EUR 781 561.05 under the contract concluded by these companies.

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