Arbitration in Lithuanian commercial agreements: establishment and early development

ENThe article reviews and analyzes arbitration law in the Republic of Lithuania over the past several decades, including the recently enacted Law on Commercial Arbitration and potential obstacles to effective enforcement of arbitral awards, and some Lithuanian observations on arbitration provisions in international commercial contracts. The starting observation in the article is that the Western-style arbitration is relatively new in Lithuania. Large businesses choose arbitration as their means of dispute resolution, but usually at the request of their foreign partner. Otherwise, Lithuanian businesses generally prefer litigation in Lithuanian courts because it is less expensive and more familiar. However, dispute resolution by means of arbitration it is quickly gaining popularity and trust among commercial entities. Analazing the legislative regulation of arbitration in Lithuania, author concentrates on the Lithuania's Law on Commercial Arbitration. This law differs from the UNCITRAL Model Law and has been criticized for its exclusions, that expressly exclude many of the kinds of claims common in commercial cases, as, for example, disputes arising from constitutional, labor, family and administrative legal relationships, etc. Author also points out, that without a body of commercial law or history of arbitration decisions, which is lacking in Lithuania, it is difficult to predict how some concrete issues would be resolved, even on the basis of the menioned law.Author analyzes such other aspects of legislative regulation of arbitration in Lithuania as tribunal powers for granting temporary relief, appellation process, the effect and enforcement of arbitral awards, and recognition and enforcement of foreign arbitral awards. After that author turns to the analysis of the position of arbitration institutions in Lithuania. There are two of them: the Vilnius International Commercial Arbitration Tribunal (VICA) and the International Chamber of Commerce (ICC). Author contends that these institutions have been criticized for their lack of a solid operational background, but are considered to provide inexpensive and prompt dispute resolution. Another object of investigation in the article is system-wide obstacles to implementation. Among them author mentions government bureaucracy, corruption and organized crime, soviet methodology and regulatory traditions, evident at lower levels of the bureaucracy, time-consuming court processes, the situation that Western-style arbitration is largely unknown to the judiciary, poor equipment of local police, under-development of commercial law.