Category: Lithuania

Over many years, the Estonian, Latvian, and Lithuanian legal markets have been dominated by the same four firms, although the names they operate under have sometimes changed. At the very end of 2018, however, the market in Lithuania, the largest of the Baltic states, shook. when a large team split off from one of those four firms, and several months later merged with a leading independent firm in the country.

A year later, it is possible to evaluate the fallout and obtain some perspective on whether that split-off was a real earthquake that restructured the landscape of the region’s legal markets, or simply a tremor that left the fundamental dominance of those four champions unaffected.

Walless Comes Into Being

Although they have, at times, operated under different names (including Raidla Lejins & Norcous, Tark Grunte Sutkiene, and Lawin), and in at least one case literally exchanged teams, the same four firms – what are now Cobalt, Ellex, Sorainen, and TGS Baltic – have more or less dominated the three Baltic legal markets. Indeed, only these four firms – let’s call them, collectively, the “Historic Four” – are ranked as first tier by Legal 500 for Commercial, Corporate, and M&A in each of the three Baltic states, and these four firms have divvied up the CEE Legal Matters Deal of the Year Awards for the Baltics in both years of those awards’ existence. They are, if not necessarily the best firms in each country, at least the best known. 

Nonetheless, in December of 2018, the status appeared to become less quo, as some 30 lawyers departed in one fell swoop from the Lithuanian office of Ellex – Ellex Valiunas – to start a new firm: Walless.

According to Walless’ Managing Partner Dovile Burgiene, the firm’s founders found themselves frustrated both by a lack of clarity about the path to equity at Ellex Valiunas, and, even more importantly, what they saw was an inability to influence the strategy and decision-making power of the firm. Burgiene emphasizes that these problems were hardly limited to her former employer. “The thing is,” she says, “many firms on the Baltic market just don’t have a clear partnership model – and we wanted to do this differently. The lack of clarity on the partnership model leads to situations where partners feel there is a miscalibration in terms of performance and payment.”

Indeed, Burgiene insists that she and her colleagues at Walless are committed to doing things differently, replacing what she perceived as a glass ceiling with a transparent structure that recognizes and rewards high achievers and sets very clear targets for the partners in a pure lockstep model. She insists that the ability of lawyers to practice in such a structure allows them to truly achieve, describing it as a “great opportunity in a lifetime of a lawyer.”

Still, the prospect of competing against the traditional market leaders was daunting; Burgiene laughs that she and her colleagues made a point of not thinking about the challenge. “Starting out, we could not know how quickly we would stabilize our business model,” she says, “but I think it helped us to just do our own thing and not think about difficulties.”

Sometime in the middle of last year, she says, confidence grew across the firm’s management that its model was working. Most of Ellex Valiunas’s Banking & Finance practice – eight of ten lawyers – had made the move, which Burgiene says made the transformation especially smooth. “This part of the business had no impact from the name change, [and kept] competing with all the larger firms for the same mandates as usual.” She insists that was true in other practices as well. “For all the other practices, it turned out to be similar – the market knows the partners as leading individuals, capable to do the same large and complex mandates as they were working under a different brand.”

Although Burgiene is reluctant to reveal Walless’ financial returns from its first year in operation, she reports that “what we can say with our deep knowledge of the market is that we have met the same KPIs of average turnover per fee earner and turnover per full equity partner as in our previous practice, and our profitability KPIs (operating margin and net margin) are better.” According to her, “this proves to us that our business model was built on the right assumptions, and we are now encouranged to further invest into maintaining top quality and strengthening our team.”

Despite their success, and although all of the Historic Four have offices in each Baltic country, Burgiene insists that Walless has no plan to enter into a pan-Baltic alliance anytime soon. “If we’re going to do something that big, we have to do it properly, and we just aren’t there yet. We do get a lot of interesting international projects, but we wouldn’t want to rush into an alliance just for the sake of being able to say we’re in one.” According to her, if Walless is eventually to consider a pan-Baltic presence, it would have to be one that has a real infrastructural presence, integration, built on aligned strategy, and “not just be a partnership or a cooperation scheme with another local firm.”

The Market Takes Note

It wasn’t only clients that took note of Walless’s success. After only a few months, on April 1, 2019, the Lithuanian office of the Levin law firm alliance, Dominas Levin, led by longtime Glimstedt Vilnius Managing Partner Gediminas Dominas, decided to join Walless as well.

“They were very motivated, very ambitious, but mostly very, very spirited and driven,” Dominas remembers thinking of the Walless team. “This mentality of always improving and going for being number one is what got my attention the most, aside from them having all the requisite capabilities of a strong firm and personnel with a proven record.” According to Dominas, who now heads Walless’s International Arbitration and Litigation practice, that core team is “experienced but still hungry,” and it remains highly motivated to succeed. “There are about 50 or so lawyers now in our ranks, and they’re all working towards the same goal of being better – day in and day out.”

And indeed, the traditional market leaders paid close attention to Walless’ creation as well. “This was the largest spin-off we’ve ever had in Lithuania, since we’ve had a legal market,” says Cobalt Managing Partner Irmantas Norkus. “And it’s not only about the numbers – these were seasoned experts in banking & finance, tax, real estate … all of this makes Walless a strong contender in Lithuania.” He believes that the spin-off reflects a generational shift, with “younger lawyers not being satisfied with the status quo and deciding to make their own future.”

Still, Norkus insists that he welcomes the new competitors. And perhaps “new” isn’t quite the right adjective anyway. “These are all established specialists and experts,” he points out. “Not some college grads rushing into it. The people in Walless have a lot of experience – they’re just organized under a different banner – which is why we choose not to ignore them.”

Norkus suggests that the Historic Four would be well-advised to consider the significance of Walless’s departure, understanding what the next generation of high-achieving lawyers is looking for. For its part, he says, Cobalt has taken an err-on-the-side-of-caution approach. “Reacting to what’s going on, we increased our partnership from 10 to 17 over the past two years. We decided to expand and integrate young, next-gen partners.” He also points with pride to the fact that Cobalt didn’t lose any of its lawyers in the past year, which he takes to mean that that the lawyers at the firm are satisfied with its current structure.

Ellex 2.0

While Cobalt, Sorainen, and TGS Baltic had the opportunity to observe Walless’ departure from the sidelines, Ellex wasn’t so lucky.

Ellex Valiunas Managing Partner Rolandas Valiunas concedes that the abrupt departure of almost all of the firm’s Banking & Finance group and significant parts of the firm’s Tax and Real Estate practices represented a major wake-up call. “Speaking of the time around December of 2018,” he admits, “I can honestly say that they weren’t the most enjoyable months of my professional career.” The firm had to move quickly to respond. “We had to cope and move on while keeping our professionalism and level of service intact,” Valiunas recalls, “so we turned to changing things internally, to crafting a more productive corporate culture.”

This proved the right approach, Valiunas says, noting that the firm’s rebuilt Banking & Finance group is larger now than it was before the separation and is “working over our capacity on some of the biggest projects in the banking sector.” He reports similar success in the M&A and litigation practices as well.

“A strong culture, that’s what made this possible,” Valiunas says. “We used the dissipation to make changes within, to consolidate the opinions of all the partners, and make amendments to our remuneration system to get people motivated.”

Valiunas describes this new approach as “Ellex 2.0,” and he describes the three pillars of the firm’s new culture. “First, he says, “we started focusing all of our competitiveness on the outside, trying to get our folks to cooperate more, to get them incentivized to offer help cross-teams, not just within one practice.” Second, Valiunas says, the firm changed its remuneration system to provide a more balanced approach to profit-sharing. “Third, we introduced more measures to have people be able to meet each other – the firm is huge, and sometimes folks would go for weeks on end without running into one another.” All that, he says, allowed Ellex Valiunas to weather the storm relatively undamaged: he claims that Ellex Valiunas completed more deals last year than any other firm in Eastern Europe.

Too Much Is Never Enough?

The Baltic legal markets, outsiders are inevitably reminded, are extremely small – even combined, the Baltic states’ nominal GDP is half that of the Czech Republic. The legal market in each of the countries is, consequently, significantly smaller than most of its CEE neighbors.

“I’ve always had a belief that market laws and logic mean these markets can only support firms of a certain size,” says Gediminas Dominas, who believes that, as a result, some of the larger firms may have outgrown their ability to keep all their lawyers busy and profitable. “I don’t think that these firms have anything wrong with them per se,” he says. “It’s just that, being that big, market conditions will force them to be ripped apart.” As a result, he says, the growing number of young lawyers starting to reach their full potential will make the generational change felt more strongly – so that what happened to Ellex “could happen elsewhere too.”

Burgiene agrees with her colleague that some firms are simply too big. “Personally, from experience, I know that any law firm with over 40 lawyers in one office is a big firm in our small markets – and if a team has over 70 people, then I fear that it cannot be utilized effectively.” She feels that it is very difficult to “utilize profitably a large team capacity due to the limited amount of work in the market in some specialized practice areas, a limited number of truly large M&A deals, and the conflicts of interests that a team that large inevitably finds itself in.”

Nonetheless, Burgiene waves away the idea that the other big firms are in any danger, suggesting that it is in fact the smaller firms that are facing the real threat. “Legal spending grows as does the GDP of our economies. This work is then distributed between all of the tiers on the market, and larger firms maintain and grow their market share by hiring and developing practitioners from smaller generalist firms or merging with smaller specialist firms. So it is more likely that the number and size of the big players will increase over time, provided, of course, that they can get their partnership model right.”

Unsurprisingly, the managing partners at the traditional market leaders also reject any suggestion that their model is flawed. Irmantas Norkus points out that the Historic Four are “very far ahead, at least for the time being,” and he says that, ultimately, “cracking into the big four is a tall order.” Ultimately, he believes, a pan-Baltic presence is necessary to compete even in one of the markets. Thus, he praises Walless as being an excellent example of a “one-country strong showing,” but says that “they run a tight ship, but still cannot compete Baltics-wide.”

Rolandas Valiunas also believes that Historic Four are likely to remain on top going forward. “I’d say that three or four firms are completely enough to handle the market. There are other firms having good partners and lawyers – I mean, if somebody leaves Ellex they still have the same experience and competence,” he adds, smiling, “but no more firms are needed. I feel we have enough experts for our current market size.”

It may be that there simply hasn’t been enough time to determine the ultimate significance of Walless. Will it, eventually, turn into a permanent and prominent member of the top tier of Baltic law firms, or or will it settle into a successful and stable member of the next tier – widely-known and respected, but only occasionally competing for top mandates? Only time will tell. In other words: Watch This Space.

This Article was originally published in Issue 7.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

 

Motieka & Audzevicius has advised the founders of Lithuania’s In Balance Grid on EUR 950,000 invested into the company by Koinvesticinis Fondas, Contrarian Ventures, and several angel investors, all of which were advised by TGS Baltic.

According to Motieka & Audzevicius, “In Balance grid develops charging infrastructure that is built on a cluster system with a master and slave design concept, where the majority of the components are off the shelf and managed by In Balance grid software. Innovations in software development allow the company to ensure the distribution of electrical energy between all consumers through dynamic load management and virtual queues.” 

The firm also reports that “joining Contrarian Ventures and Koinvesticinis Fondas are Mantas Mikuckas, the co-founder of Vinted, the first unicorn founded in Lithuania, and Ernestas Petkevicius, a seasoned angel investor.”

Motieka & Audzevicius’ team included Partner Justinas Jarusevicius and Senior Associate Rokas Jankus.

TGS Baltic’s team included Partners Aurimas Pauliukevicius and Dalia Tamasauskaite-Ziliene and Associate Julija Skardziute.

On December 12, 2019, CEE Legal Matters reported that Dentons, Magnusson, and TGS Baltic had advised the Avia Solutions group – a Lithuanian aviation services group – on a five-year bond issuance with a total value of USD 300 million, an annual interest rate of 7.875%, and a maturity date of 2024. The bonds were issued in US dollars and distributed in the US and European markets. White & Case and Sorainen helped JP Morgan and BNP Paribas organize the issuance.

We spoke to Dentons’ Partner Cameron Half, who (along with Partner Nick Hayday) led his firm’s team, about the deal.

CEELM: How did you become involved in this matter? Why and when were you selected as external counsel to Avia Solutions initially?

Cameron: We were invited to participate in a competitive pitch process against eight to ten other international law firms, based on the strength of our capital markets team (particularly in CEE) and our geographic focus. [Avia Solutions] also had previous contact with some current Dentons partners.  The final selection was made following a number of meetings between our core team for the transaction, the company, and its financial advisors. The final selection was based on our team’s substantive offering and the overall fit between our team and approach and ASG’s requirements as well as Dentons’ expertise in the aviation sector, including on a number of EMEA capital markets transactions.

CEELM: What, exactly, was the initial mandate when you were retained for this project, at the very beginning?

Cameron: As US and English counsel on a high yield bond offering, our overall scope of work was largely as we had anticipated.  However, at the outset of work none of the parties to the transaction truly anticipated the number of acquisitions and resulting complexity of financial disclosure.  In the end, the offering memorandum included five separate sets of financial statements and five distinct components to the business and financial disclosure, which was one of the most complex presentations that we have seen.  Through the breadth of the Dentons offering, we were also able to advise a guarantor on corporate matters in connection with the bond, as well as to provide specialist advice on matters that arose in the course of due diligence.

CEELM: Who was on your team, and what were their individual responsibilities?

Cameron: Our team was led jointly by me and Nick Hayday, a London-based capital markets partner.  We worked with associates in our capital markets team in London, with support from our US-based US tax and sanctions and trade policy lawyers.  We also involved associates in our Scottish offices to assist on various aspects of the transaction, particularly managing and conducting the due diligence process across the complex and multi-jurisdictional group structure and to help coordinate our work on diligence and disclosure with the TGS Baltic and Magnusson teams.

CEELM: Please describe the final agreements with all parties in as much detail as possible.

Cameron: The transaction was documented as a Eurobond with high yield covenants, with an English-law trust deed structure, listed on Euronext Dublin’s Global Exchange Market.  The notes were issued by ASG Finance Designated Activity Company, an Ireland-incorporated finance vehicle for the group, and guaranteed by Avia Solutions Group (CY) plc, AviaAM Leasing AB, Baltic Ground Services UAB, Chapman Freeborn Holdings Limited, FL Technics UAB, and SIA Smart Aviation Holdings. The listing reflected practice in the Eurobond market, with GEM chosen as the appropriate market in light of the complex financial disclosure.  As US and English counsel to the issuer and guarantors, Dentons led advice to the company throughout the process, including negotiation of the transaction documentation and drafting of the offering memorandum, delivery of customary legal opinions, and coordinating the listing.

CEELM: What’s the current status of the issuance?

Cameron: The transaction was completed on December 3, 2019.

CEELM: What was the most challenging or frustrating part of the process?

Cameron: The most challenging part of the process was the complexity of the group structure and the timing of the acquisitions in relation to the bond issuance.  As ASG only completed the acquisition of AviaAM Leasing, Chapman Freeborn Holdings, and SIA Smart Aviation Holdings (in turn a holding company for two ACMI, or aircraft, crew, maintenance and insurance, operators, Smartlynx and Avion Express) in October 2019, there were a number of complex accounting, disclosure, and diligence matters arising until quite late in the process, for which we and the other transaction participants were required to find solutions on a “real time” basis.

CEELM: Was there any part of the process that was unusually or unexpectedly easy?

Cameron: The ASG team was very focused on completing the transaction in 2019 before the 1H2019 accounts went “stale” for a Rule 144A offering. They kept an open dialogue with us and other working group participants to ensure that any matters within their control were quickly raised and resolved.

CEELM: Did the final result match your initial mandate, or did it change somehow from what was initially anticipated?

Cameron: Based on the successful completion of the bond offering, we believe that this aligned with our initial mandate.  The process by which we got there was however somewhat more complicated!

CEELM: What specific individuals at Avia Solution directed you?

Cameron: We worked most closely with Vladas Bagavicius (Adviser to the Chairman), Aurimas Sanikovas (CFO), Ricardas Laukaitis (Deputy CEO), and Ronaldas Kontautas (Legal).

CEELM: How were the responsibilities divided between Dentons, Magnusson, and TGS Baltic on this matter? How did the firms coordinate/communicate/collaborate?

Cameron: As US and English counsel to the issuer and guarantors, Dentons led advice to the company throughout the process, including negotiation of the transaction documentation, drafting of the offering memorandum, and coordinating the listing.  The TGS and Magnusson teams were responsible for advising the guarantors (other than Chapman Freeborn, which is incorporated in England and Wales and was advised by Dentons) as to provision of the guarantees and entry into the transaction documentation, as well as conducting due diligence on the portion of the business in the relevant jurisdictions.

CEELM: How would you describe the working relationship with Sorainen and White & Case on the issuance?

Cameron: We have a very good working relationship with the White & Case team, both as a firm and individuals. Most day-to-day discussions were by telephone and email, with in person diligence sessions at ASG’s headquarters in Vilnius.

CEELM: How would you describe the significance of the deal to the Baltics and/or CEE in general?

Cameron: This was a ground-breaking transaction for the Baltic region. It was the first high-profile debt offering by a fast-growing pan-European Baltics-based business, and will fund the further growth and expansion of the group’s operations. The offering structure demonstrated investor support for complex issuances by growing businesses from the region, as well as the sophistication of the Group’s management.

This Article was originally published in Issue 7.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

 

In recent years, the government and courts of Lithuania have intensified their attempts to develop mediation. There are many reasons for this – promoting social peace, decreasing court caseloads, saving time and money for the end-users, and providing them with higher satisfaction among them.

The constant pressure to introduce mediation that is coming from policy- and decision-makers has resulted in more tangible results. It is already common for state courts to offer mediation to parties and their lawyers in civil and commercial court cases. Courts generally put even more pressure on parties to attempt mediation in particularly complicated cases. In 2019, the Lithuanian legislator even empowered civil courts to require parties to attempt mediation when it is deemed appropriate. Mediation is made more attractive by a reduction in court fees as a “carrot” and possible litigation costs sanctions for failure to use it or misuse of it as a “stick.”  As a result, the number of cases involving formal attempts at mediation has already increased almost tenfold from 2015, when only about 100 were attempted. And that’s only the beginning, as more significant changes have been brought to life by the legislator at the start of 2020.

Mandatory Mediation

By following the example of Italy and some other states, Lithuania launched mandatory mediation as a prerequisite to contentious family legal actions in court at the beginning of this year. An obligation to try mediation before filing a claim extends to litigation involving divorce, maintenance of a child, determination of residence, property obligations, and other family disputes. Over the first month of 2020, more than one hundred applications to initiate mediation were received. The number of applications is expected to grow on a monthly basis, as there are around four thousand family disputes in courts each year. Extending mandatory mediation into other fields of disputes is likely to be considered as well if its performance in family matters turns out well. The Mediation law envisages possible up-scaling to other fields. 

Under the new legislation, if one party applies for mediation, either the mediator or the State Guaranteed Legal Aid Service will send the other party a notice of initiation. If the consent of the other party to the dispute is not obtained within fifteen working days, that party is deemed not to have consented to the mediation. In such cases, the party to the dispute who initiated the mandatory mediation is entitled to apply to the court for a judgment in its favor. If parties do not turn to mediation on their own initiative and at their own expense, mandatory mediation services will be paid for from the state budget and provided for up to four hours. The State Guaranteed Legal Aid Service assists in selecting and appointing mediators. There is certain degree of obstruction and worry that the mediation infrastructure is not yet well prepared. Nevertheless, resistance is far from resembling the lawyers’ strike that broke out in Italy when mandatory mediation was first introduced in that country.

What Does That Mean for the Practice of Law? 

First and foremost, Lithuanian lawyers are now aware that mediation is no longer just a theory or an extraordinary phenomenon and that they will need to integrate it into their day-to-day professional lives. Clients appreciate having more information and more efficient assistance in the course of mediation by lawyers when the added-value of such services is demonstrated. Multiple examples show that clients are ready to pay for it at legal services market fee rates. Many lawyers have already adjusted and can offer appropriate assistance in mediation. The ones who struggle with it are negatively perceived by judges, and the threat of cost sanctions is not helping conservatives. So hostility to mediation in such a context inevitably results in the reduction of professional success. In addition to being sharp and skilful lawyers in legal battles, Lithuanian lawyers have found a door to a new practice, and an increasing number are receiving mediator training and enrolling on the mediators’ list.

I believe that the rise of mediation in Lithuania has brought interesting and exciting changes. A higher level of flexibility in choosing and applying means of dispute resolution, as well as more happy clients winning disputes with mediated settlements, will bring our profession more satisfaction from both a psychological and business perspective. 

By Rimantas Simaitis, Partner, Cobalt

This Article was originally published in Issue 7.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

 

On March 11, 2020, CEE Legal Matters reported that Sorainen had successfully defended HR solutions provider Amston before the Equal Opportunities Ombudsperson in Lithuania. We spoke with Henrika Bivainiene, Director of Amston, about the case.

CEELM: What is Amston?

Henrika: Amston is a leading strategic HR management solutions company, with talent recruitment at the heart of our business. Our people are dedicated experts, always passionate about delivering the best solutions across every stage of the employee lifecycle. I am a general manager of the company. 

CEELM: Tell us a bit about the proceedings. How long did the whole process last?

Henrika: We received an inquiry from the Office of the Equal Opportunities Ombudsperson of the Republic of Lithuania about the feedback that we gave to a candidate who we had presented to our client and who participated in the recruitment process. It was alleged that that feedback was discriminatory, although we provided more detailed feedback by phone, and we wrote by email that the candidate was rejected because of not being a cultural fit. When written by email this phrase seemed ambiguous. The most difficult thing was to understand that the feedback we wrote sounds ambiguous, but we were sure that what we had in mind was lack of fit with the team’s personal qualities and personality traits, and certainly we did not mean gender, race, age, religion, or other. Proving that the phrase was used for exactly what we meant seemed like a difficult task.  

CEELM: What was the preparation for the process like?

Henrika: We contacted Sorainen from the very moment we received the inquiry. We were asked to send all available information – the correspondence with the candidate, the job advertisement, etc., as well as telling the law firm what kind of questions we usually ask candidates during interviews, how we present candidates to our clients, and how we provide feedback. All of this was needed so that Sorainen could prepare the best answer to the inquiry and would have as many details as needed to defend our position. 

CEELM: What were the claimant’s main arguments and what do you believe ultimately convinced the Equal Opportunities Ombudsperson to reject the claim?

Henrika: It was alleged that because of us the candidate felt discriminated against because of her ethnicity, beliefs, or views. Zygimantas’ team helped us find arguments that would convince the Ombudsperson of Equal Opportunities that there was no discrimination – one of these arguments was that the organizational culture is also a criterion by which a person can be chosen for a job or be rejected from the recruitment process. Zygimantas’ team had the difficult task of representing our position since the feedback that was sent by email was indeed ambiguous, so it was necessary to explain how recruitment is done, what the process looks like, how businesses today choose their employees, and what criteria are essential. However, this was done perfectly well and the claim was rejected.

CEELM: Why did you retain Zygimantas Pacevicius and his team for help in this case?

Henrika: We had worked with Zygimantas previously. We are confident that he and Sorainen are a team of professionals who know their job really well and are dedicated, and not only react quickly, but find a solution in any situation and help clients to feel safe and calm.

Sorainen has provided pro bono advice to Invega on Covid-19 measures for affected businesses.

According to Sorainen, “Invega invited financial institutions to apply to participate in implementing the Portfolio Guarantees for Loans 2 and Portfolio Guarantees for Factoring 2 incentive financial instruments. Both measures are designed to help businesses access or restructure funding when they lack funds. The Portfolio Guarantees for Loans 2 instrument is designed to facilitate access to finance in the form of loans and leasing, while the Portfolio Guarantees for Factoring 2 instrument is designed to facilitate the provision of factoring financing for commercial transactions.”

According to the firm, the measures are implemented through financial institutions, “thus reducing the risk of business financing. These measures are part of a government-approved economic stimulus package to help businesses reduce losses resulting from the quarantine.”

Sorainen’s team included Senior Associate Agne Sovaite and Associate Goda Drasute.

Nove advocates Veikko Puolakainen and Veiko Vaske have successfully represented the Political Parties’ Supervision Commission in Lithuania’s Supreme Court.

According to Nove, the dispute involved the the obligation of the editor-in-chief of the city of Tallinn’s municipal newspaper Stolitsa to repay money he received as a prohibited donation to the City of Tallinn. According to the PPSC, “the publication in the city newspaper of an article reflecting the activities of a candidate for office … was a political advertisement published in favor of the applicant before the elections, not a neutral article reflecting the city government’s activities. The city newsletter cannot be considered a free independent press. As the local government paid for the advertising from the city budget, it is considered a prohibited donation within the meaning of the Political Parties Act.”

According to Nove, the subsequent appeal was dismissed in both the administrative and circuit courts. “The Supreme Court dismissed the cassation appeal filed against the decision of the circuit court, changing the reasons for the decision. The Supreme Court reiterated the previous position that a donation is an activity where a legal person (including local government) pays for a party member for advertisements made to a third party depicting the party member with the aim of influencing voters. The Supreme Court explained that this principle also applies if a person is not a member of a political party, but only a candidate on the party list. According to the Supreme Court, the courts had correctly established that the city newsletter Stolitsa was a politically unbalanced publication. The appearance of an article in the list of a party exercising sole power in the city in a politically unbalanced newsletter indicates that it is a political advertisement. Instead of politically competing positions, the article emphasized the applicant’s candidacy, which was not politically neutral. The context in which the article appeared, the content of the article, the subsequent elections, and the emphasis on the applicant’s candidacy also confirm that the real purpose of the article was to influence voters. Thus, the information published in the newspaper was a political advertisement in favor of the applicant …. It was therefore justified to consider the article as a prohibited donation within the meaning of the Political Parties Act.”

Sorainen has successfully represented Alfa Bank, as the creditor of Arvi Ir Ko, in a case concerning the annulment of company sales transactions of Arvi Ir Ko.

According to Sorainen, “a panel of judges of the Lithuanian Court of Appeal ruled to annul the sale of Lietuvos Cukrus, Rietavas Veterinarine Sanitarija, and Arvi Kalakutai to Cypriot companies. This court decision will enable creditors to continue recovering their debts. The court recognizes indirect creditors’ right to challenge debtors’ transactions.”

Sorainen’s team included Partner Laurynas Lukosinuas and Associate Greta Kubiliunaite.

Sorainen has advised Lords LB Special Fund I Subfund B investment fund on its lease of a 7000 square meter area in its Lvovo business center in Vilnius to Telia Global Services Lithuania, a telecommunications company in Scandinavia and the Baltics.

According to Sorainen, “The A+ energy class office building and its underground parking lot will take up an area of 23,000 square meters. The plan is for the business centre to open in the first quarter of 2021. Lords LB Special Fund I Subfund B will invest EUR 40 million in the project.”

Sorainen’s team included Partner Kestutis Adamonis and Senior Associate Karolis Kunigelis.

Sorainen did not reply to our inquiry on the matter.

Motieka & Audzevicius has successfully represented Axis Industries in an insurance indemnification dispute.

According to Motieka & Audzevicius, “Axis Industries is a contractor that designed and installed a mechanical biological treatment plant for household waste in the Alytus district [of Lithuania] in 2015,” and Alytus Regional Waste Management Center “stated that the contractor, Axis Industries, had not fulfilled its contractual obligations properly and in a timely manner.” According to the firm “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 Gjensidige pay EUR 781,560.90, 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.”

According to Motieka & Audzevicius, “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 … according to the surety insurance letter issued by the defendant.”

Finally, the firm reported, “after a successful showing before the Lithuanian Court of Appeal, both the Vilnius Regional Court and the Lithuanian Court of Appeal ruled that there are no grounds to satisfy the claim of Alytus Regional Waste Management Center.”

Motieka & Audzevicius’ team included Partner Jovitas Elzbergas and Senior Associate Donatas Lapinskas.