Orlen Lietuva, the Lithuanian oil import and refining subsidiary of Poland’s oil group Orlen, has failed to recover more than 8 million euros in damages and interest from Inter RAO Lietuva, a former power supplier controlled by Russia’s energy giant Inter RAO, for undelivered electricity.
In its July 10 judgement that is final and not subject to appeal, the Supreme Administrative Court of Lithuania rejected Orlen Lietuva’s claim and lifted an 8.4-million-euro asset freeze imposed on Inter RAO Lietuva in December 2023.
Under the 2015 contract between the companies, Inter RAO Lietuva contracted to supply energy to Orlen Lietuva, but failed to do so after Lithuania’s Financial Crime Investigation Service (FCIS) restricted its operations in the spring of 2022.
The oil company said it had to purchase electricity from Elektrum Lietuva and Eesti Energia, and on the Nord Pool exchange, and generate part of the energy itself, resulting in losses of 7.931 million euros.
It asked the court to award it this amount in damages, plus 457,400 euros in interest and 6 percent procedural interest.
Orlen Lietuva also argued that Inter RAO Lietuva had no right to invoke force majeure circumstances – sanctions imposed due to the war in Ukraine – as these could have been anticipated when the contract was signed in 2015.
According to the oil company, Inter RAO Lietuva could have continued supplying energy and received payment into an escrow account or after the expiry of the sanctions.
Meanwhile, Inter RAO Lietuva told the court that in April 2022, the FCIS restricted its operations by freezing its funds, shares and real estate, making it impossible to fulfill the contract.
The court decided that if Inter RAO Lietuva continued to supply energy to Orlen Lietuva, it would mean unilateral contract fulfillment, which would not be fair.
Moreover, Orlen Lietuva had a long history of cooperation with the supplier before the sanctions were imposed, “indicating that it was regarded as a reliable business partner”, according to the court.
In the spring of 2022, the FCIS froze Inter RAO Lietuva’s funds and shares due to its links with Russian President Vladimir Putin.
Source: BNS
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