Commercial contracts were terminated by decree and Potashcorp took the Lithuanian government to court

2022-05-27 0 By

Belaruskali, a large state-owned company in Belarus, has filed a lawsuit with a court in Vilnius, Lithuania, against the Lithuanian government’s decision to force The Lithuanian railway company (LTG) to terminate its long-term contract with the company, Lithuanian State Radio television reported on its website on January 28.Audris Kutrevičius, a spokesperson for the Vilnius Regional Administrative Court, confirmed to the media that the request was received last Friday local time, according to Licit Media.The spokesman said the Belarusian company was applying to the court to overturn the Lithuanian government’s Decision on January 12 to terminate the transport contract and the conclusions of a special government commission on December 21 on the contract.In 2018, Lithuania’s state-owned railway company LTG signed a cooperation contract to transport its products from belarusian company “Belarusian Potash fertilizer” to Lithuanian ports, providing for the transport of about 11 million tons of Belarusian fertilizer products annually through The Lithuanian port of Klepeda until the end of 2023.Belarusian Potash is one of the largest potash producers in the world and its export earnings are also a major source of foreign exchange earnings for Belarus.Since Belarus is a landlocked country, a large amount of the company’s products are first transported by rail to Lithuanian ports for shipping.On December 21, 2021, after the Belarusian company was sanctioned by the United States, a special committee of the Lithuanian government concluded that the transport contract conflicted with Lithuania’s “national security interests.”The announcement opened the door for the Lithuanian government to terminate the contract, Reuters said at the time.The Lithuanian Cabinet then decided on 12 January 2022 that the contract must be terminated on 1 February.Marius Skuodis, Lithuania’s minister of transport and communications, later said fertilizer shipments under the previous contract would then have to stop, arguing that the government’s decision had left the contract without any legal basis for survival.The minister said the cabinet’s decision was the first step to stop the transit of Belarusian fertilizer through Lithuania.But he added: “Of course any decision can be appealed, but on the government side we feel confident that we are doing what the law requires us to do.”And The head of Lithuanian railways, Mantas Batuska, has said that if the company unilaterally terminates the contract without a legal basis, it could face international arbitration and possibly trigger fines that could bankrupt the company.After the US sanctions against Belarus took effect on December 8, 2021, Potashcorp’s activities to transport products through Lithuanian railways did not stop, as the company made an advance payment that covered the cost of railway services for several months, the Media noted.(Edit: LH)