Arbitration and insolvency proceedings are legal instruments governed by different objectives and different legal principles. While in arbitration the autonomy of the parties plays a major role, all insolvency proceedings are collective proceedings where autonomy of the parties is strictly limited, the majority of issues are regulated by binding legal provisions and strong controlling powers are vested into insolvency court. Therefore, in this article the authors analyse the issues of compatibility between insolvency proceedings and arbitration. The Lithuanian legal framework which (...) was in force until 30 June 2012 was ambiguous. According to the wording of Article 11 of the previous Law on Commercial Arbitration, disputes connected with bankruptcy shall not be submitted to arbitration. It was not entirely clear whether this provision was restricted to ‘core’ insolvency issues such as opening and conduct of the proceedings, appointment of the office holder, administration of the estate, liquidation etc. or it also included all other questions related with insolvency. The jurisprudence of the Lithuanian courts gave a broad meaning to the restriction expressed in the Law on Commercial Arbitration. Accordingly, such questions as verification of claims and disputes with the creditors were also excluded from arbitration after announcement of bankruptcy of the debtor. The authors argue that distinction should be drawn between cases in which an insolvent enterprise is a claimant and where it is a defendant. It is also important to draw a line between arbitration agreements entered into before announcement of bankruptcy and arbitration agreements concluded by the bankruptcy trustee with the consent of the majority of creditors. In this article, the new Law on Commercial Arbitration which has entered into force on 30 June 2012 is analysed and according to which an insolvent enterprise remains bound by arbitration agreement in both cases where it is a claimant and where it is a defendant. Several contentious issues of the new law are identified and analysed in the article, such as the position of other creditors in the proceedings, relation between arbitration and restructuring procedure, enforceability of arbitration agreement in cases where an insolvent enterprise lacks funding to pay arbitration costs etc. (shrink)

Within the context of the insurable interest in cargo insurance contracts, in this publication the writer analyses the theoretical aspects of the insurable interest and the relevant laws. Dealing with the problems of determining the insurable interest in cargo insurance contracts the writer has examined the possible options of insurance of the cargo in transit, and while analysing the law governing transport and the sale of goods he examines a person‘s insurable interest in the cargo insured and legal remedies to (...) protect such an interest by concluding a cargo insurance contract. The writer believes that the legal regulation of the insurable interest in Lithuania, interpreting the insurable interest as a loss sustained by a policyholder, the insured or the beneficiary upon an event insured against, fails to guarantee the protection of proprietary and economic interests of persons engaged in the circulation of commodities. Laws governing cargo insurance contracts in Lithuania do not provide a flexible protection of interests of the participants in trade operations and impedes the development of trade and transit, therefore the legal regulation of cargo insurance, especially of the insurable interest should be improved. (shrink)

This article deals with the ordering of interim measures in the arbitration process. Under the Lithuanian law, only one interim measure can be applied by commercial arbitration courts. It involves granting an order to pay the established amount as a deposit. This measure cannot be enforced unless the party acts in good faith and agrees to pay the deposit. However, if a party ignores the decision of the arbitration court, a third party court may apply to the state court with (...) a request to order interim measures provided for in the Lithuanian Code of Civil Procedure. Under the existing Lithuanian legislation, state courts have the exclusive right to order enforceable interim measures. The present situation is not satisfactory and should be changed. The legislator is now considering a new draft law on the Lithuanian commercial arbitration. The draft law provides for changes in ordering interim measures. The proposed regulation is in compliance with the goals of Article 17 of UNICITRAL Model Law on Commercial Arbitration. However, compliance with the rules of UNCITRAL is not the main goal of the proposed regulation. With the new regulation, the legislator aims for more efficient commercial arbitration with more extensive scope that will allow the commercial arbitration court to order interim measures independently. By allowing the commercial arbitration court to order interim measures independently, the legislator extends credibility of arbitration and makes it more inviting for the parties. Under the draft law on the Lithuanian commercial arbitration, state courts and commercial arbitration courts as discretionary institutions shall be entitled to order interim measures. On the other hand, a decision or a ruling of the commercial arbitration court shall be enforced if an execution order is issued by the state court. In this case, the state court shall be entitled to review whether the content of the decision or ruling of the commercial arbitration court complies with the imperative rules of law or public order. According to the proposed draft law on the Lithuanian commercial arbitration, both state and commercial arbitration courts shall have an independent right of discretion to order interim measures. However, some differences exist. In cases heard by commercial arbitration courts interim measures shall be ordered, whereas state courts acting under applications for interim measures filed by the parties or commercial arbitration courts, irrespective of the location of the arbitration process, shall be entitled to order interim measures. (shrink)