Court: Kaunas government is not obliged to repay Luminor’s loan for Kamesta

On February 11, the Lithuanian Court of Appeal rejected the company’s appeal and confirmed the decision of the Kaunas Regional Court taken in spring 2020.

“There is no reason to alternatively hold the Kaunas City Municipality’s administration liable under the Credit Agreement, since said agreement and commitment of the parties is not based on the provisions of the agreements or other factual circumstances established in the case. “said the Court. of Appeal ruled.

In rejecting Kamesta’s claim in spring 2020, the Kaunas Regional Court declared that even if the basis of the subsidiary’s vicarious liability arises, the interests of the bank, but not Kamesta, would be protected in principle. According to the court, Kamesta sought to ensure that the bank guaranteed the loan and avoid this obligation.

In 2005, Kamesta won the competition for the construction and maintenance of the left bank of the Aleksotas Bridge. Under the agreement, the company received LTL 4.49 million from the then Nord / LB Lietuva bank (now Luminor). A loan of EUR 1 000 was limited to this project and the loan had to be repaid from the concession fee paid by the municipality.

The City of Kamestai has committed to paying LTL 724,000 annually for 25 years. The company had to carry out construction work and monitor the site. However, after paying almost 2 million. euro, the municipality terminated the contract in 2009.

Disputes between the concessionaire and the municipality have developed over several years. In 2012, the parties signed a peace agreement, according to which the Kaunas government had to pay LTL 3.77 million to Kamestai in six months. and the company to continue working.

In early 2016, the municipality again terminated the concession contract because, according to it, Kamesta violated the essential terms of the contract. In 2018, the Supreme Court held that the Kaunas authorities had done it illegally.