The main measure to identify assets in Lithuania is public registers. The vast majority of information held in the registers is accessible even if a party does not have an enforceable judgment, hence the presence of assets could be checked prior to enforcement stage.
The two most commonly used registers are the Real Property Register and Cadastre (Nekilnojamojo turto registras ir kadastras) and the Register of Legal Entities (Juridinių asmenų registras).
The Real Property Register and Cadastre contains data of all real estate objects registered in Lithuania and ownership as well as its history, property restrictions, etc. Search in this register may be conducted either by a person’s name – to identify all assets registered in his/her name, or by checking a particular asset to identify its owner and other related information. Besides ownership, the Real Property Register and Cadastre contains information about pledges and mortgages of real estate.
The Register of Legal Entities contains detailed information about Lithuanian legal entities as well as branches and representative offices of foreign companies and organisations operating in Lithuania. This register contains current and historical data about legal form and status of legal entities, size and structure of the authorised capital, members of sole and collective management bodies, shareholders, etc. This register also has so-called Information System of Legal Entities Participants (Juridinių asmenų dalyvių informacinė Sistema or JADIS), which is specifically created to collect data about shareholders of legal entities. A search in this system may be conducted either by checking shareholders of a particular legal entity of by searching of all legal entities in which a person has a stake.
More detailed information about pledges and mortgages, including pledges of movable, unregistered property, as well as sale-purchase agreements of unregistered items by instalment, sale-purchase agreements of unregistered items with the right of repurchase, leasing contracts (financial lease), the subject of which is an unregistered item, and contracts for the lease or use of unregistered items are collected and available at the Register of Contracts and Restrictions on Rights (Sutarčių ir teisių suvaržymų registras).
Information about trademarks protected on a national level is stored in the national trademark database, which is freely available online. Information in this database is administered by the State Patent Bureau of the Republic of Lithuania.
All road vehicles are also registered at the Register of Road Vehicles.
If there is sufficient doubt that a debtor may unfairly avoid debt recovery, may hide, or transfer his/her assets to another party, the creditor is entitled to ask the court to apply various types of interim measures. Usually, such interim measures involve asset freezing order towards the debtor, which is enforceable by a bailiff. If the court issues a freezing order, the bailiff can track and seize the debtor’s assets in accordance with operative part of the court’s freezing order.
Either the bailiff enforces a freezing order, or an enforceable court’s decision, or another document. The Code of the Civil Procedure of the Republic of Lithuania provides that the debtor must, at the request of the bailiff, provide in writing data on the assets held and their whereabouts, including assets that are with third parties, as well as funds in credit institutions.
The court decides on the merits of the case by means of a final judgment. In the final judgment, the court may award property or its value, or order a person to do or refrain from doing certain actions. Declaratory reliefs are allowed only to some extent, namely, as far as such reliefs produce substantive legal effects.
The court may also pass a partial judgment in the case. A partial judgment in the case is possible when there are several prayers for relief submitted. A partial decision is the final decision in that part of the dispute.
It is also possible to bifurcate civil proceedings, so the court adopts a judgment on the grounds of the claim at first, and then decides on the quantum of the claim later in the proceedings.
If the court did not resolve any of the claims raised in the case, a supplementary judgment may be issued, which is considered to be the final judgment in that part of the dispute.
The court may give a judgment in absentia, if one of the parties fails to appear at the hearing, provided that that party had been duly informed, or if one of the parties fails to submit an answer to the claim, a response to the answer to the claim or a rejoinder.
The Code of the Civil Procedure sets out two special simplified procedures, the outcome of which is a preliminary judgment and a court order. The first procedure is a documentary proceeding. A party may commence a documentary proceeding if the claim is for money, movable property, securities or arising out of a lease of real estate to evict the tenant, and the statement of claim is based on written evidence only. The court then adopts a preliminary judgment, which is not enforceable immediately, as it may be disputed by another party.
The second procedure is cases regarding issuance of court orders. This procedure is very standardised and is available for monetary claims only. The court checks only if the request to grant a court order is prima facie substantiated, and then sends a notification for the respondent, who has a term of 20 days to reply if he/she agrees with the order. It is sufficient to simply notify the court that the respondent does not agree with the court order for the court to annul the order. However, if the respondent does not reply within the time limit set, the court order becomes enforceable. This procedure is mostly used to recover relatively low-value, undisputed debts.
The court may also adopt court orders to apply interim measures, including asset-freezing orders. Such orders are enforceable immediately.
Courts of appellate instance pass a court order if it was decided to leave the judgment of the court of the first instance unchanged or to change the operative part of it. However, if a court of appellate instance decides to annul the previous judgment and to adopt a new one, the court issues a new judgment.
The Supreme Court of Lithuania, which acts as a cassation court, decides cases by issuing court orders.
In Lithuania, domestic judgments are enforced by bailiffs. Certain documents, such as court orders regarding interim measures, are directly enforceable, therefore they may be passed directly to a bailiff. However, to enforce a final judgment, a party has to approach the court of the first instance and to ask for a writ of execution. This procedure is very formal, and the writ of execution is typically issued within one or two days. All documents that may be enforced by bailiffs are generally called enforcement documents.
Enforcement documents may be passed to a bailiff, who, upon a request of a creditor, commences enforcement proceedings. Before opening enforcement proceedings, the bailiff must check if there are no obvious obstacles to the acceptance of the enforcement document and the commencement of enforcement proceedings. If no obstacles were identified, the bailiff opens enforcement proceedings and usually has an obligation to serve the debtor with an enforcement notice, calling the debtor to implement the decision amicably, and sets a time limit to do that. If the debtor fails to comply with the judgment within the time limit set in the enforcement notice, the bailiff shall, not later than ten days after the expiry of the time limit, start enforcing it.
The bailiff is obliged to take all lawful measures on his/her own initiative to ensure that the judgment is executed as quickly and efficiently as possible and to actively assist the parties in protecting their rights and interests protected by law. The means of enforcement provided by the law are as follows:
Opening of insolvency proceedings is not in any way formally connected to the enforcement proceedings. Grounds and procedure for commencement of insolvency of a legal or natural person are regulated by the Law on the Insolvency of Legal Persons and the Law on Bankruptcy of Natural Persons. A creditor may, if there are certain grounds, initiate insolvency proceedings for a debtor, if the debtor is a legal entity, but it has no legal obligation to do so.
Typical Enforcement Costs
There are three types of enforcement costs provided in the law:
The amount, calculation and payment of enforcement costs are set out in the Instruction on Enforcement of Judgments.
The general rule is that the creditor shall pay the costs of administration of the enforcement proceedings, and that has to be done upon the submission of the enforceable document for the bailiff. In limited cases, the creditor shall also pay the costs of third parties for the services rendered by such parties in the particular enforcement proceedings, as well as the remuneration of the bailiff. In all cases, the costs of enforcement shall be recovered from the debtor.
Both the costs of administration the enforcement proceedings and remuneration to the bailiff are calculated with regards to the amount being recovered. The administration costs are fixed and would not exceed EUR220, which is the top cap and is applicable if the recovery amount is EUR29,000 or more. Remuneration to the bailiff is calculated as a percentage from the amount being recovered, but it cannot be lower than the bottom value provided in the Instruction on Enforcement of Judgments. The higher the amount being recovered, the lower the percentage rate of the remuneration to the bailiff. The lowest rate is 4%, and it is applied if the recovery amount is EUR29,000 or more, but it cannot be lower than EUR1,740.
If the decision being enforced does not concern recovery of debt, the administration costs and remuneration to the bailiff are decided by the category of the decision. For example, administration costs in case of enforcement of interim measures amount to EUR40. Additionally, EUR24 per hour of the bailiff's work when seizing (describing) assets belong to the bailiff as remuneration for the execution of enforcement.
The costs incurred by third parties for services rendered by those parties in the particular enforcement proceedings include costs for postage and courier services, storage of property, relocation and/or removal of property, execution of electronic auctions, remuneration for experts, translators and other persons involved in the enforcement process, advertisements in the media, bank transfers, paid inquiries, and other expenses that the bailiff is obliged to pay to third parties in the exercise of his/her functions. The amount of these costs is determined by actual costs.
The length of enforcement proceedings depends heavily on the assets owned by the debtor. As explained in 2.2 Enforcement of Domestic Judgments, typically it takes one to two days to obtain a writ of execution form the court when the court’s decision becomes effective. When the writ of execution is submitted for the bailiff, the bailiff has to open enforcement proceedings within three working days and to serve the debtor with an enforcement notice, giving the debtor ten days to comply with the decision, unless otherwise is set by a court. When this term expires, the bailiff may use all available means of enforcement listed in 2.2 Enforcement of Domestic Judgments. If the debtor has sufficient funds in his/her bank account, the bailiff may recover debt almost immediately. However, if that is not the case, the further timeframe depends on variables such as type and number of assets the debtor owns; whether they are registered in public registers; and whether the debtor makes an effort to delay the enforcement proceedings by challenging the bailiff’s actions and orders.
In the enforcement proceeding, a bailiff is entitled to seize the debtor’s assets in the amount necessary to enforce the decision. To seize assets and recover from them, the bailiff has to identify the debtor’s assets. The bailiff does that using the information available in public registers. What is more, the law entitles the bailiff to request the debtor to provide information on his/her assets and their location; and assets held with third parties and funds in credit institutions. The debtor is legally obliged to comply with such a request.
As a general rule, court judgments become enforceable when they become effective. Judgments of the court of the first instance become effective when a term to appeal them expires. Therefore, submission of an appeal automatically prevents the decision to be enforced. Decisions of the courts of appellate instances become effective immediately. It is possible to submit a cassation appeal against the decision of the courts of appellate instance, but that does not automatically prevent them from being enforced. If the cassation appeal is admitted, the Supreme Court may order to stay the enforcement of the appealed decision.
In the enforcement proceedings, all bailiff’s orders may be appealed on both formal and material grounds. The appeal has to be submitted within 20 days after a person became aware about bailiffs' actions that are challenged by the appeal. This term may be renewed if it was missed due to justifiable reasons, unless 90 days or more has passed since the challenged act was carried out. The appeal has to be submitted to the bailiff, who has to either accept the appeal or deny it and send to the court of the first instance within five working days.
If a declaratory relief is awarded, and the decision does not award any property, specific performance and does not oblige a person to omit from certain actions, such a decision cannot be enforced.
All judgments are publicly announced and stored online in a national court system named Liteko. Decisions uploaded in this system are with any private data removed. However, it is just a search engine with its own limitation and no official register of all judgments exists. Therefore, it is nearly impossible to obtain a comprehensive list of all cases and judgments adopted against a certain party. However, even if a defendant complies with the decision and settles his/her debt, the decision remains to be publicly announced. Notably, decisions annulled by the courts of higher instances are also precluded from the search engine.
Judgments that contain state, professional and commercial secrets are not publicly announced. Also, some decisions are unavailable in order to protect the confidentiality of personal or family life.
Foreign judgments must be recognised by the Court of Appeal of the Republic of Lithuania. EU member states’ court judgments are recognised and enforced on the basis of EU Regulations (without exequatur), whereas Icelandic, Norwegian and Swiss judgments are on the basis of the Lugano Convention. Judgments of other countries are on the basis of bilateral Legal Aid Treaties. If there is no bilateral agreement between the Republic of Lithuania and the country that issued the judgment, Lithuanian national law is applicable. The general rule is that the Lithuanian court will not review the judgment and the inspection is limited to the absence of grounds for refusal.
There are two main groups of foreign judgments: judgments that are subject to the exequatur and those that are not. To ensure the free movement of judgments, the exequatur procedure has been abolished in the EU. As Lithuania is a member of the EU, judgments issued in other EU countries are enforced in Lithuania under a simplified procedure. A bailiff in Lithuania executes judgments issued by other EU countries on the basis of certificates concerning a judgment issued by them. No additional procedures are needed.
In the absence of an international convention between Lithuania and the country that issued the judgment, the enforcement of non-EU judgments may be refused if:
If the creditor seeks to enforce a judgment issued by an EU member state, the creditor must submit to the Lithuanian bailiff a certificate of judgment issued by the issuing court. The bailiff will carry out enforcement actions on the basis of mentioned document.
If the creditor seeks to enforce a judgment issued in a non-EU member state, the creditor must submit an application for exequatur to the Court of Appeal. The application must be accompanied by a translation of the foreign judgment into Lithuanian, as well as a confirmation that the judgment has become final. The Court of Appeal sends the application to the debtor and examines the application. As a rule, the application is heard by written procedure and only in exceptional cases the court grants an oral hearing.
The court may recognise only part of the foreign judgment. The creditor also has the right to apply for recognition of part of the foreign judgment. If the Court of Appeal grants the application, the foreign judgment may be enforced by a bailiff. Orders of the Court of Appeal can be appealed in cassation to the Supreme Court.
If the creditor seeks to enforce EU member states’ court judgment, the creditor only incurs the costs of the bailiff, which the creditor can recover from the debtor. The bailiff shall give the debtor ten days to execute the judgment in a good faith. If the debtor fails to fulfil its obligations under the judgment within this time limit, the bailiff shall initiate enforcement proceedings.
If the creditor seeks to enforce a non-EU member state’s court judgment, the creditor incurs not only the bailiff's costs referred to above but also legal costs for representation in the Court of Appeal. An application for recognition and enforcement of a foreign court award in the Republic of Lithuania is exempt from stamp duty.
The exequatur procedure in the Court of Appeal takes at least a few months (and could be longer if, for example, the debtor could not be served). Orders of the Court of Appeal can be appealed in cassation to the Supreme Court. Proceedings before the Supreme Court can take another six months.
The grounds for challenging enforcement of EU members issued judgments are these:
The Bilateral Legal Aid Treaties provide similar grounds for refusing to recognise and enforce a foreign judgment, but the number of grounds is smaller. Also, Lithuanian law also provides for a list of grounds for refusing to recognise a foreign judgment that is close to EU law.
In practice, refusal to enforce a foreign judgment in Lithuania is very rare.
Lithuania is a party to the New York Convention (ratified on 17 January 1995). Ever since, the Lithuanian courts have diligently followed the standards set by the Convention, applying its internationally accepted interpretation. In 2002 Lithuanian Supreme Court established a rule that Lithuanian courts, when applying and interpreting the New York Convention, must rely on the foreign case law on interpretation and application of this Convention.
The are no particular legal issues concerning the enforcement of arbitral awards.
When enforcing an arbitral award under the New York convention, the Lithuanian court will not review the award on its merits. The recognition and enforcement may only be refused on the grounds set in the Convention.
In Lithuania, the approach to enforcement does not vary for different types of arbitral awards. Perhaps enforcement of domestic awards as compared to foreign awards in practical terms is slightly easier as it does not require translation of the award into Lithuanian. Moreover, it does not require recognition by the Court of Appeal. However, domestic awards can be challenged and set aside on very similar grounds (Lithuania is a UNCITRAL Model Law country) as those listed in the New York Convention.
There is no particular category of arbitral awards that will not be enforced in Lithuania, unless there are grounds for refusal under the New York Convention. Partial and interim awards, as long as they are considered as awards, are enforceable. It is likely that awards issued in the country that is not a party to New York Convention may be problematic.
The process of enforcing domestic arbitral awards is easier than foreign arbitral awards. The court should issue an execution writ at the request of the party. The execution writ is a document enforceable by a bailiff.
The procedure for enforcing a foreign arbitral award is slightly more complex. A foreign arbitral award must be recognised and the enforcement must be granted the Court of Appeal. After such recognition and granting of the enforcement, the arbitral award is enforced by the bailiff.
If the creditor seeks to enforce domestic arbitral awards, the creditor only incurs the costs of the bailiff, which the creditor can recover from the debtor. The bailiff shall give the debtor ten days to execute the judgment in good faith. If the debtor fails to fulfil its obligations under the arbitral awards within this time limit, the bailiff shall initiate enforcement proceedings.
If the creditor seeks to enforce a foreign award, the creditor incurs not only the bailiff's costs referred to above, but also legal costs for representation in the Court of Appeal. An application for recognition and enforcement of a foreign award in the Republic of Lithuania is exempt from stamp duty.
The procedure in the Court of Appeal takes at least a few months (and could be longer if, for example, the debtor could not be served). Orders of the Court of Appeal can be appealed in cassation to the Supreme Court. Proceedings before the Supreme Court can take another six months.
The recognition and enforcement of a foreign award in Lithuania may be refused on the grounds set in the New York Convention. This includes situations where the award is challenged on the basis that it has not yet become binding on the parties or has been set aside or suspended by a competent authority of the country in which, or under the law of which, the award was made (Convention Article V(1)(e)). If the award is challenged or appealed, but under the law of that country has become binding, technically it should be recognised and enforced in Lithuania, but it remains to be seen what would be the case law of the Supreme Court.
The most common objection to enforcement under the New York convention in Lithuania is a public policy objection.
Under case law of the Lithuanian Supreme Court, public policy is to be understood as international public policy: fundamental principles of due process and mandatory rules of substantive law embedding generally accepted principles of law.
Contrary to public policy can be awards awarding manifestly excessive interest, award issued by tribunal in the absence of a binding arbitration agreement, or by a tribunal that lacks impartiality and independence. Award of liquidated damages and anti-suit injunctions – concepts not know in Lithuanian law – have been recognised by the Lithuanian Supreme Court, as not contrary to public policy.
Generally, it has been held that wrongful determination of facts, wrong application of law, refusal to apply statute of limitations or failure to assess all evidence on file would mean a court intervention and review of the case on its merits, thus not allowed at the enforcement stage.
In practice, refusal to enforce a foreign award in Lithuania is very rare.