LRT | 3 February 2025
Belaruskali demands €12bn in damages from Lithuania over transit sanctions
Belarusian potash fertiliser producer Belaruskali wants 12 billion US dollars (around 11.82 billion euros at today’s exchange rate) in compensation from Lithuania after it suspended transit shipments across its territory in 2022. The Belarusian company filed an international arbitration lawsuit against Lithuania on December 2 last year.
“In its Statement of Claim, the Claimant seeks to recover USD 12,090,167,971 (as at 27 November 2024) in damages from the Republic of Lithuania,” the Permanent Court of Arbitration (PCA) said in a statement.
In October 2023, Belaruskali initiated investment arbitration proceedings against Lithuania after the Baltic state’s government deemed the freight contract between Lietuvos Geležinkeliai (Lithuanian Railways, LTG), the country’s state-owned railway company, and Belaruskali invalid in January 2022, leading to the suspension of the transport of potash fertilisers through Lithuania from February 1 that year.
The Belarusian fertiliser giant claims that the contract was terminated illegally and possibly in violation of the bilateral agreement on investment promotion and protection signed between Lithuania and Belarus in 1999, and demands damages.
In response, the Lithuanian Ministry of Transport and Communications rejected Belaruskali’s accusations in early December and said the country’s arguments would be submitted to the arbitration court.
“The mere fact that Belaruskali has submitted claims against Lithuania does not automatically mean they are justified. On the contrary, Lithuania is confident that its decisions are fully justified and lawful,” it added.
The sanctions against Belaruskali were imposed by the European Union by common agreement of its members, and Lithuania is implementing these sanctions, which are currently in force and are impactful, the ministry said.
The EU General Court has already dismissed Belaruskali’s lawsuit against the existing sanctions, and Lithuanian courts have also rejected Belaruskali’s appeals and found the national authorities’ decision lawful.
BNS reported in September that the arbitration case would be heard in Geneva, led by renowned arbitrator Gabrielle Kaufmann-Kohler from Switzerland, and will also include renowned arbitrators Azzedine Kettani from Morocco (nominated by Belaruskali) and Zachary Douglas from the United Kingdom (appointed by Lithuania).
Belaruskali exported its produce via the Lithuanian seaport of Klaipėda annually for more than a decade, but the shipments stopped on February 1, 2022, after Lithuania’s state-owned railway company terminated its long-term contract with the company.
The move followed the Lithuanian government’s decision that the contract on the transit of Belaruskali fertilisers to Klaipėda was not in line with national security interests.
Belaruskali’s fertilisers were handled at the port by Birių Krovinių Terminalas (BKT), a bulk cargo terminal controlled by Igor Udovickij, a local businessman, and the Belarusian manufacturer. Blaruskali has a 30-percent stake in BKT.
Lithuania’s LTG Cargo used to transport around 11 million tons of Belaruskali fertilisers a year.