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New Legislation

30 Jun 2012

On 30 June 2012, the Law amending the Law on Commercial Arbitration came into force implementing a new wording of the Law on Commercial Arbitration (LCA). New wording of the LCA was harmonized with latest amendments to the UNCITRAL Model Law on International Commercial Arbitration.

The following changes in the legislation may be considered as the most sufficient:

1) Arbitration is no longer categorized into two types: national commercial arbitration and international commercial arbitration;

2) Paragraph 1 of Article 6 provides that any written notice shall be deemed to have been received if it is delivered to the addressee via terminal equipment of electronic communications.

3) Point 3 of Paragraph 3 of Article 10 of LCA states that arbitration agreement concluded by terminal equipment of electronic communications shall be valid if the integrity and authenticity of the information transferred was ensured and the information contained therein is accessible so as to be useable for subsequent reference.

4) Paragraph 1 of Article 11 states that the court receiving a claim, the subject matter of which is subject to arbitration agreement, refuses to accept it, irrespective of whether either party requests the court to do so.

5) From now on disputes connected with competition and bankruptcy may also be submitted to arbitration. Article 3 of LCA defines disputes on remuneration for incompliance with the competition law as commercial disputes and Paragraph 7 of Article 49 states that commencement of the bankruptcy proceedings in respect of either party to the arbitration agreement or other bankruptcy proceedings in respect of either party to the arbitration agreement does not affect the arbitral process, the validity and application of arbitration agreement, the possibility to resolve the dispute in arbitration and the competence of arbitral tribunal to resolve the dispute, with the exception of few cases envisaged by this law. Furthermore, parties may agree to submit the dispute to arbitration even if the dispute arises from employment or consumption agreements, though only if the arbitration agreement was concluded after such dispute arose (Paragraph 2 of Article 12).

6) Just as in the previous wording of Article 13 of LCA Paragraph 1 states that in all cases the number of arbitrators must be uneven, however the new wording this article also states that the resolution of tribunal consisting of an even number of arbitrators shall not be invalid for this reason only.

7) The new wording of LCA provides the possibility for the Vilnius Regional Court to appoint arbitrator in ad hoc arbitration in case the arbitrator is not appointed by either party. 

8) New wording of LCA states that the arbitral tribunal has the right to grant injunction by issuing a respective order which shall constitute an enforceable document. If the order is not enforced voluntarily the party may apply to the Vilnius Regional Court for an enforcement order (Paragraph 1of Article 20, Paragraph 2 of Article 25).

9) Paragraph 1 of a new Article 42 states that on the matter of the case the arbitral tribunal may adopt a final, partial or a supplementary decision.

10) Recourse to the Lithuanian Court of Appeal against an arbitral award can be made within one month (three months was in the previous wording of the LCA) from the date on which the arbitral award was made.

Arbitration is a great alternative to court proceedings. Almost every commercial dispute can be referred to arbitral tribunal consisting of professionals in certain fields. It is a cheaper and more time efficient way of resolving commercial disputes. Nevertheless, the arbitration is not that popular in Lithuania and it is hoped that the new wording of LCA shall increase the efficiency of arbitral proceedings and encourage business partners to choose arbitration in resolving their disputes.

You can find the new wording of the Law on Commercial Arbitration in Lithuanian by following this link.

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