Udovickij initiates case against Lithuanian govt over Klaipeda port expansion

  • 2020-01-31
  • BNS/TBT Staff

VILNIUS – A court of first instance will have to hear again a complaint by Biriu Kroviniu Terminalas (BKT), a cargo handling company co-owned by businessman Igor Udovickij and Belarusian fertilizer producer Belaruskali, against the Lithuanian government over its planned restrictions for the company to expand in the port of Klaipeda.

The Lithuanian Supreme Administrative Court on Wednesday satisfied BKT's complaint and referred the issue of its acceptance for consideration to Vilnius Regional Administrative Court. The latter refused to accept the company's complaint in November.

"The case materials are not public, therefore, the ruling is not published. I can only say the dispute is related to the government resolution," the LSAC's spokeswoman Neringa Lukoseviciene said.

In September, the government considered a transaction as part of which BKT asked for permission to acquire the shares of Nemuno Terminalas, another cargo handling company owned by the Udovickij family, but the decision is confidential.

Sources have told BNS the Cabinet decided to block the transaction and ordered the government commission considering strategic transactions to introduce additional safeguards after taking into account the risks identified by the State Security Department.

Udovickij told BNS in late October that BKT had received the government commission's recommendation and said that judging by them he understood that the commission "clearly wants the terminal not to be allowed to expand".

"The commission's recommendations are just non-implementable and clearly discriminatory, and they are so unspecific and of general nature that that can be interpreted in any way in the future. It means that Biriu Kroviniu Terminalas cannot make any investments as it maintains that they might be deemed illegal in the future," Udovickij said in a comment sent to BNS.

BKT said in the middle of October that the government commission decided on Sep 12 that the company did not meet national security interests, and the government tasked the commission on Sep 30 to set conditions for the company's investments, with BKT stating that they would stand at around 70 million euros.

But on Oct 8, the commission set such conditions that, in BKT's view, run counter to Lithuanian and EU law and the country's international commitments, and are non-implementable.

According to BKT, the commission's actions destabilize the company's operations. The terminal's executives say the permission was necessary for expansion as it plans to considerably increase exports of Belarusian potassium fertilizer via the port of Klaipeda in 2024-2025, from around 10.5 million to 15-16 million tons a year.

Moreover, by discriminating the BKT shareholder, a Belarusian investor, the commission violates the Lithuanian-Belarusian treaty on the promotion and protection of investments. Besides, its conclusions were based on false facts about the activity of BKT's shareholders, BKT said in its October statement.

BKT and Nermuno Terminalas are located next to each other at the port. Based on data from the Center of Registers, Udovickij holds a 70 percent stake in BKT and Belaruskali owns the remaining 30 percent of shares.