The Court has clarified the conditions under which an agreement on default interest may be deemed contrary to public order (Article 1.81 of the Civil Code).
Attorney at Law of law firm SPES has successfully defended the right of the client (creditor) to claim 0,2% default interest from the debtor as specified in the contract.
In the case in question, the contractual default interest was challenged as incompatible with the principles of public order and good morals, i.e as unreasonably high, since as much as 2 million EUR in default interest had accrued during the delay.
The court clarified that, in order for an agreement to be declared contrary to public order or good morals, one must demonstrate that the main intention of the parties was to pursue an objective contrary to public order at the time of the transaction. If the agreed default interest rate was found suitable by the parties when the contract was concluded, but later came to be seen as “unreasonably high” after the recovery commenced, this points at a desire to avoid a contractual penalties and does not prove that the agreement was illegal. Default interest could be declared contrary to public order and good morals if imposed in order to unduly increase the debt and thus harm the interests of the debtor’s other creditors; however, there is reason to believe that the default interest was agreed upon with a view to the lending terms (an interest-free business development loan), therefore there is no legal basis for declaring the parties’ agreement as to the rate thereof null and void.
The victory at the Vilnius Court of Commercial Arbitration.
Attorney at Law of law firm SPES has been successful in represented a client in a dispute between two business contractors, which was examined at the Vilnius Court of Commercial Arbitration.
The dispute arose over whether or not the settlements (payments) under a commercial contract were to be regarded as appropriate. Following a cyber attack, email messages were distributed to business partners on behalf of the firm’s client, instructing them to transfer any amounts due to the client to a bank in a foreign country. One of the contractors claims to have transferred the entire amount payable to the firm’s client to an account with this precise bank.
In the decision the Court of Arbitration has clarified that the contractual terms and conditions become binding on the parties and may only be amended in the same manner as the one used to conclude the contract, that is, by way of written agreement, which also applies to situations where the contract specifies the parties’ respective details, including their account numbers. The absence of an agreement on a settlement account to which the payments are to be made implies that in transferring the funds to another account not specified in the contract, the partner of the firm’s client was not sufficiently prudent and diligent, and therefore did not fulfill the payment obligation in an appropriate manner.
The firm has been successful in defending a client accused of illegal enrichment.
Attorney at Law of law firm SPES has managed to defend a client accused of illegal enrichment, which was acquitted by the court that found that no act with signs of a crime or misdemeanor had been committed.
In acquitting the accused, the court relied on the presumption of innocence and held that the accused had no obligation to prove that the enrichment had been lawful. The duty to prove that a person owned the property in question while knowing that it could not have possibly been acquired through legal means, or could or should have had this knowledge, rests with the accusing party. Therefore, the owner’s inability to explain their ownership of the property with reference to their legitimate income per se may not serve as a basis for finding them guilty. In addition, the court stated that the accusation of unlawful enrichment could not be based on statistical indicators (such as statistical construction costs, consumption indicators and others), since the conviction cannot be grounded in assumptions and the court’s findings must be based on evidence which indisputably proves the defendant to be guilty.
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