With Belarusian potash fertiliser producer „Belaruskalij“ finally filing a lawsuit against Lithuania for billions of euros in damages for the suspension of fertiliser transit, Lithuania says it disagrees with all the allegations made in the lawsuit and will submit its arguments to the arbitration, the Transport and Communications Ministry told the BNS news agency on Wednesday. 

„The Republic of Lithuania disagrees with all the claims made by „Belaruskalij“ in its claim to the arbitration court and will submit its arguments of disagreement to the arbitration court within the deadlines set“, – said the statement issued on Wednesday. 

„Lithuania is a state governed by the rule of law and complies with all its obligations under international law, and arbitration – is the normal procedure for resolving investment disputes. The mere fact that „Belaruskalij“ has made claims against Lithuania does not in itself imply the validity of such claims. On the contrary, – Lithuania is convinced of the full reasonableness and legality of its decisions“, – the ministry said in response to BNS' questions on the progress of the case. 

Sanctions against "Belaruskali" were imposed by the European Union by common consent of its members, and Lithuania is implementing these sanctions, which are currently in force and have an impact, the ministry said.

The Ministry recalls that the EU General Court has already rejected a lawsuit by „Belaruskalij“ challenging the sanctions, and Lithuanian courts have rejected „Belaruskalij“'s appeals and found that the decisions of the Lithuanian authorities were lawful.

„Belaruskalij“ initiated its action against Lithuania in October last year, but after it failed to pay the arbitration fee on time, the court suspended the proceedings until 30 August this year, and once it had paid the fee, the proceedings were resumed and it was instructed to file a detailed claim with specific claims against Lithuania by 2 December.

Belarusian state news agency "Belta" reported that the lawsuit against Lithuania is based on its allegedly unlawful actions in violation of the company's rights as a foreign investor protected by an agreement between the governments of Lithuania and Belarus on the promotion and protection of investments. 

„Belaruskalij“ CEO Andrei Rybakov told the agency that the company had made all the claims in the lawsuit in a „cold calculation“ in order to receive full compensation for the costs from Lithuania. 

The amount of the claim has not been disclosed, but the head of the fertiliser maker says it is „very significant“.  

BNS reports that it could amount to around €1 billion. 

„Belaruskalij“ launched investment arbitration proceedings against Lithuania in October last year after the government declared the January 2022 freight contract between „Lietuvos geležinkeliai“ and „Belaruskalij“ invalid.

The Belarusian fertiliser giant claims that the termination of the contract is illegal and possibly in violation of the bilateral agreement on the promotion and protection of investments signed between Lithuania and Belarus in 1999, and is demanding compensation for the damage caused.

The Permanent Court of Arbitration (PCA) has ruled in favour of Belarus and Belarus. The Permanent Court of Arbitration (PCA) announced in September that the arbitration is headed by renowned arbitrator Gabrielle Kaufmann-Kohler (Gabriel Kaufman Kioler) from Switzerland, and also includes renowned arbitrators Azzedine Kettani from Morocco (appointed by Belaruskali) and Zachary Douglas from the UK (appointed by Lithuania). 

The seat of the arbitration is in Geneva, Switzerland.

The transit of „Belaruskalij“ from the border with Belarus to the port of Klaipėda has been running for more than a decade and was due to last until the end of 2023, but was terminated on 1 February 2022, after the Government confirmed that the contract between „Lietuvos geležinkeliai“ and „Belaruskalij“, which was due to last until the end of 2023, did not meet the country's security interests. 

„Belaruskalij“ fertilisers were handled at the port by the Bulk Terminal, controlled by businessman Igor Udovitsky and „Belaruskalij“, in which „Belaruskalij“ has a 30% stake.

The rail freight company „LTG Cargo“ used to transport about 11 million tonnes of „Belaruskalij“ fertilisers per year.