Legislation, Lithuania, Railways, Transport

Based on a draft government resolution that has been made publicly available, the Transport Ministry will likely be authorized to represent Lithuania in all possible disputes with Skinest Rail.

A Skinest Rail official, who asked not to be named, told that the company plans to defend its rights outside of Lithuania, with filing an international arbitration claim being among the options. 

Lietuvos Gelezinkeliai (Lithuanian Railways) earlier this year refused to sign a contract on the purchase of railway sleepers with Skinest Rail, which had been named the winning bidder. The Lithuanian government stated in June that the contract with Skinest Baltija, worth over 3 mln euros, was not in line with national security interests.

It said in a resolution Skinest Rail's owner Oleg Ossinovski "maintains relations with institutions of foreign states or natural or legal persons from those states which increase the risk or pose a threat to national security".

Also, Ossinovski was a suspect in a corruption case in Latvia.

Lietuvos Gelezinkeliai in June signed a contract on railway sleepers with Swetrak, the runner-up bidder.

Skinest Rail unsuccessfully appealed the decisions by the state railway company and the government to Lithuanian courts. 

Ossinovski's Skinest is accused of giving a bribe of 500,000 euros in Latvia in reward for LDz Ritosa Sastava Serviss, a subsidiary of the Latvian state owned railway company, purchasing four old locomotives for several mln euros from Skinest.

Estonia and Lithuania have signed an agreement on the promotion and reciprocal protection of investments that entered into force on June 20, 1996.