SPC Legal has provided assistance to UAB Caverion Lietuva related to its construction of a production facility for the Thermo Fisher Scientific Baltics expansion.
Thermo Fisher Scientific Baltics is a manufacturer of medical and scientific products. The company has constructed the 5,500 square meter production facility in just four months.
SPC Legal’s team was led by Partners Giedrius Murauskas and Povilas Karlonas.
Motieka & Audzevicius has persuaded the Supreme Court of Lithuania to reverse the ruling by the Court of Appeals to dismiss the claims by bankrupt Lithuanian national airline company FlyLAL against airBaltic and the Riga International Airport and order the case returned for reconsideration.
According to M&A, “FlyLAL claimed damages caused by airBaltic and Riga International Airport due to anticompetitive actions (prohibited agreements (Article 101 of TFEU) and abuse of dominant position (Article 102 of TFEU). The Supreme Court of Lithuania fully annulled the decision made by the Court of Appeals under which flyLAL‘s claim was dismissed and decided to refer the case back to the Lithuanian Court of Appeal for reconsideration.”
According to the firm, “the Court of Cassation stated that the part of FlyLAL’s claim for damages in connection with the prohibited agreement between respondents [was] not properly investigated and examined. The Court of Cassation also found that the Court of Appeal had improperly applied the rules on abuse of a dominant position and had failed to properly assess airBaltic’s pricing compliance with Article 102 of TFEU, leading to an incorrect assessment and examination of the claim for damages in connection with the infringement of Article 102 of TFEU.”
Previously, the court of the first instance found that the two defendants’ actions were anticompetitive and awarded more than EUR 16 million in damages and interest to FlyLAL.
Motieka & Audzevicius’s team was led by Partner Ramunas Audzevicius.
Sorainen, working with London-based Gowling WLG, has advised Reorg, a provider of financial and legal intelligence, on its acquisition of Aggredium Finance, a specialist in European sub-investment grade credit bond and loan data.
“As part of our global growth strategy, Reorg continues to invest in each of our regions,” commented Reorg Founder and CEO Kent Collier. “We are delighted to add Aggredium to the Reorg platform, enhancing our analysis and reporting on the high-yield bond and leveraged loan markets in Europe.”
Sorainen’s Lithuanian team included Partners Laimonas Skibarka, Mantas Petkevicius, and Saule Dagilyte, Counsel Indre Sceponiene, Senior Associate Aurelija Daubaraite and Jurgita Karvele, and Associates Mindaugas Baniulis, Sidas Sokolovas, and Jurgita Tekoriene.
Sorainen has advised Lithuanian-based UAB Scandagra on the acquisition of a majority stake in Silutes Girnos, a company operating grain storage facilities and related real estate. Cobalt advised the stock sellers on the deal.
UAB Scandagra is an agro trading and organic/conventional grain trading company that belongs to the Scandagra Group, which is jointly owned by the largest Swedish cooperative, Lantmannen, and the Danish cooperative DLG.
Sorainen’s team included Partner Algirdas Peksys, Senior Associates Jonas Kiauleikis, Simona Stanciukaite, Aurelija Daubaraite, Svetlana Rudaja, and Irma Kirklyte, and Associates Garbriele Raizyte and Lukas Vaisvila.
Cobalt’s team included Partner Akvile Bosaite and Senior Associate Julija Aleska.
Cobalt has successfully represented the interests of Vintage Holdings Limited in proceedings against the Isle of Man-based company initiated in Lithuanian courts by BAB Ukio Bankas and BUAB Ukio Bankas Investicine Grupe.
According to Cobalt, “the case involved extremely large monetary claims for both damages and the award of debt and interest. In a lawsuit filed by BAB Ukio Bankas, it claimed damages of more than EUR 14.515 million and interest exceeding EUR 4.361 million from Vintage Holdings Limited. BUAB Ukio Bankas Investicine Grupe claimed more than EUR 31.606 million in debt, interest and default interest from [Vintage Holdings].”
The Kaunas Regional Court and the Court of Appeal of Lithuania dismissed in their entirety both the claim of BAB Ukio Bankas and the claims filed by BUAB Ukio Bankas Investicine Grupe as unfounded. According to Cobalt, “the courts concluded that no damage had been caused to BAB Ukio Bankas and that no violations had been committed by Vintage Holdings Limited. The courts of first instance and appellate instance also ruled that BUAB Ukio Bankas Investicine Grupe has no right of claim against Vintage Holdings Limited for debt, interest and default interest.”
The Supreme Court of Lithuania upheld the decisions of the lower courts, putting an end to the case.
Cobalt’s team included Partner Marius Inta and Senior Associate Vaidas Kontrimas.
Cobalt has advised venture capital fund Practica Capital on its investment in Lithuanian biotech startup Droplet Genomics. Triniti reportedly advised Droplet Genomics on the investment round, which included other business angel investors and amounted to EUR 1 million.
Droplet Genomics aims to commercialize droplet micro-fluidics technology, which enables researchers to study single cells and single molecules. According to Cobalt, “experiments performed at such resolution, allow scientists to uncover new facets of human biology, diseases and speed up drug discovery research. Droplet Genomics develops hardware systems, consumables, and software solutions. They intend to create easy to use workflows that would enable researchers to tap into the potential of droplet micro-fluidics technology for studying complex biological systems, as well as high-throughput screening applications.” According to the firm, “this investment will enable Droplet Genomics to expand its intellectual property portfolio and accelerate the commercialization of new products.”
Cobalt’s team included Partner Eva Suduiko and Senior Associate Aurelija Balciune.
On the 5th of October, the new regulation of the European Parliament and of the Council on European crowdfunding service providers for business was approved. Although crowdfunding activities are already regulated in Lithuania by national laws, this new regulation represents a real opportunity for Lithuania and Lithuanian crowdfunding service providers.
The New Regulation Will Bring More Expenses on Compliance
Crowdfunding service providers (CSPs) have been regulated in Lithuania for almost four years. During this period, the CSP market has been developing at a rapid pace. The amounts invested using CSPs have risen 12 times, from just over EUR 1 million in 2017 to over EUR 16 million in 2019. Such a rise in a short three-year period shows that the current regulations are enough to facilitate the growth of the CSP market. Nevertheless, considering the fact that under the EU’s new regulation all current CSPs will be required to receive a EU-level license to continue their services, one must wonder whether new, stricter, and more detailed regulations will not adversely affect the local market. Compared to the current regime, the regulation will introduce more detailed and strict requirements regarding project owner evaluation, investor assessment, the provision of information to investors, and rules on messaging and loan portfolio management, as well as more comprehensive requirements for internal procedures and policies. All these differences mean that crowdfunding operators will need to invest significant funds to improve their current systems and to initiate relicensing (although the regulation allows national supervisors to apply a simplified procedure). The period for preparation is only 24 months after the regulation enters into force. It is also noteworthy that the scope of Lithuanian and European regulations slightly differ. Under Lithuania’s regulation, the threshold for the maximum amount gathered by one project owner is set at EUR 8 million, compared to only EUR 5 million in the EU’s regulation – a reduction which can also be considered a negative change for the Lithuanian market.
The Benefits Outweigh the Additional Costs
Although there will be additional requirements and expenses related to aligning existing procedures with the requirements of the EU’s new regulation, the positives outweigh the negatives. Under the current legal regime, unless they are willing to invest in complying with the different requirements of each EU member state, CSPs are constrained to the market of only one member state. Under the regulation, CSPs will be able to use passporting to provide services in all EU member states. This will help to save costs and time for CSPs and will expand the choices for other interested parties (project owners and investors). Due to differences in legal regimes and language barriers, project managers have been unable to make easy use of CSP services within the EU, and investors were also restricted (for various reasons) to investing in their own home countries. The new regulation introduces various new possibilities for current CSPs, such as integrating messaging boards into their crowdfunding platforms and providing loan portfolio management services. The latter change in particular has been eagerly awaited by Lithuanian CSPs, as the sole sanction applied by Bank of Lithuania against a CSP during the entire existence of the national crowdfunding regulation was related to the CSP’s attempts to provide loan portfolio management services. Moreover, the new services that will be allowed under the regulation, along with the increased amount of information that CSPs and project owners who use CSP services will need to provide, will encourage more people to consider investing in CSPs, which in turn should increase CSP market services.
A New Possibility for Lithuania’s Thriving FinTech Sector?
Lithuania already positions itself as a European FinTech hub. The local regulator has proven that even though it applies strict standards when it comes to compliance (especially money laundering and terrorist financing prevention), it welcomes financial innovation and FinTech companies. This means that there is still room for new market players – and that local Lithuanian CSPs can use their experience and know-how to expand their activities to new markets within the EU. Combined with the local regulator’s friendly attitude and experience in dealing with CSP-regulation matters, Lithuania is perfectly positioned to become not only the go-to place for electronic money and payment institution licenses, but as a European CSP center as well.
By Akvile Bosaite, Partner, and Robertas Grabys, Associate, Cobalt
This Article was originally published in Issue 7.11 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
Adon Legal has helped Paymont obtain an Electronic Money Institution license from the Bank of Lithuania.
According to Adon, “the newly established financial institution is authorized to issue electronic money and provide certain payment services (execution of credit transfers and payment transactions covered by a credit line, issuance of means of payment, acquiring of payment transactions and money remittance).” The firm reported that, since the owner of the institution is Czech-based Ronda Holding, Paymont will provide services to Ronda Holding’s customers at first, before expanding to the rest of the EU.
Adon’s team consisted of Partner Donatas Sliora and Junior Associate Simas Staniulis.
Sorainen has advised Open Circle Capital on its investment in Monimoto, a company developing a smart trackers for motorcycles. SPC Legal advised Monimoto on the deal.
According to Sorainen, “Monimoto successfully secured EUR 400,000 during its crowdfunding campaign and from a follow-up investment by venture capital funds Open Circle Capital and Iron Wolf Capital. In total it attracted funding from 392 investors.” According to the firm, with the funding raised, “Monimoto aims to expand its product offering, scale up its team, and boost the growth of the company in order to launch in new markets. This total means it has exceeded its target by EUR 100,000, helping it to fulfill its mission of stopping motorcycle theft and entering the North American market.”
Sorainen’s team was led by Senior Associate Vytautas Sabalys.
SPC Legal’s team included Partner Mindaugas Rimkus and Junior Associate Brigita Ruibyte.
It is customary in Lithuania’s political system for the government to alternate between parties on the opposite sides of the political spectrum with every two election cycles, says Andrius Iskauskas, Partner at Wint. And so, he notes, “right wing and liberal parties came to power and replaced the leftist parties after the elections in late October 2020.” Nonetheless, he points out, in parliament, curiously enough, a relatively new very liberal party formed a coalition with a more traditional right wing party.
Due to the recent change of government, Iskauskas says, the legislative process has been somewhat slow. “Nothing dramatic has been happening,” he says, “but a proposal of a new business support plan was made by the government last week.” In the meantime, he says, the process of attracting skilled workers to the country, mainly from Belarus, is still under way, and to that end, permissive immigration policies have been introduced. The new rules should facilitate the acquisition of a blue card and residence permits, as well as the recognition of credentials of foreign experts, especially from the IT field.
Despite the political sector’s shift, Lithuania’s business sector has seen some positive trends recently, according to Iskauskas, who says that “we feel quite good vibes from businesses, and their attitude is ‘we survived the first wave of the pandemic, we will survive the second.’” Those phrases reflect tangible improvements on the market, Iskauskas reports, noting that “the real estate market, both in terms of development and sale of commercial and residential units, has soared.” In addition, he says, “the levels of personal savings in banks have reached an all-time high recently,” which he says is only in part explained by the pandemic.
Another currently-prospering area is e-commerce, which, in Iskauskas’s words, really jumped at the opportunity to grow in the new sedentary reality. “Not only clothes, but also pharmaceuticals, and even groceries are being ordered online,” he explains. “Even my parents, who are now in their seventies, have switched to buying food online.” Seeing the upward trajectory of online sales, a few Lithuanian retailers – such as Rimi – also jumped on the wagon, according to Iskauskas, who reports that “Maxima, which is one of the largest Lithuanian companies, will also launch its business in Poland.”
Finally, disputes have increased, according to Iskauskas, and there has been a lot of work for lawyers in litigation, albeit in a less traditional fashion. “Prior to the pandemic people believed that online hearings are possible only in theory,” he says. “However, as soon as the pandemic struck, we have found a way to surpass all the obstacles and now live hearings via Zoom or Microsoft Teams are becoming common, at least in civil cases.”