Vilnius to turn to Stockholm arbitration over damage compensation by France’s Veolia

Some 34 members of the council voted in support of taking the issue to the Stockholm arbitration, with no votes against and seven abstentions.

“There is no other way than go to the arbitration and initiate arbitration over the sums demanded. (…) Today we are turning to the council for a green light to the bid to go to arbitration over the damages, which amounts to 200 million euros,” Mantas Burokas, CEO of the municipal heating grid operator Vilniaus Silumos Tinklai (Vilnius Heating Grid, or VST), said at the council’s meeting on Tuesday.

Vilnius Vice-Mayor Valdas Benkunskas told BNS on Monday that, with the council’s approval, the claim to the Stockholm arbitration would be drafted within a few months.

At the end of March, the Vilnius municipality and VST filed a claim of around 200 million euros after Veolia and Vilniaus Energija (Vilnius Energy), the French group’s local subsidiary whose 15-year lease on the Lithuanian capital’s heating system has recently ended. Veolia and Vilniaus Energija rejected the claim in mid-April.

Veolia and Vilniaus Energija back in January 2016 initiated a dispute against Lithuania at the International Center for Settlement of Investment Disputes (ICSID) in Washington. The companies claim around 100 million euros in compensation from Lithuania for its allegedly unfair treatment and expropriation of the group’s Lithuanian assets.

Vilniaus Energija handed the Lithuanian capital’s heating grid over to VST after its 15-year lease on the assets expired on Mar ch 30.