Banks, Financial Services, Latvia, Legislation, Lithuania

After hearing an appeal lodged by PrivatBank, the Lithuanian Supreme Court on Jun. 27 overturned a ruling by the Lithuanian Court of Appeals, which was favorable to Ukio Bankas, and upheld the Kaunas Regional Court's decision of June 2015 not to hear the lawsuit brought by the Lithuanian bank.

According to the Supreme Court, an agreement on correspondent relations between Ukio Bankas and PrivatBank provides for any disputes or disagreements arising from the agreement to be settled through negotiations or referred to Latvian courts.

Ukio Bankas asked PrivatBank to return all the funds kept in its correspondent accounts the next day after its operations were suspended by the central Bank of Lithuania in February 2013.

However, PrivatBank in the same year took over a claim worth 752,100 US dollars against Ukio Bankas from Pennygold Trading Supplies and A.S.C. Invest LLP and notified the Lithuanian bank that had executed a unilateral set-off, saying that Ukio Bankas still owed it 32,900 dollars.

Ukio Bankas, in its turn, notified PrivatBank that it did not agree with the set-off.

The Latvian bank is controlled by Ukraine's PrivatBank.