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Lithuania files €240mn lawsuit against French energy group Veolia

Lithuania’s energy ministry has filed an unprecedented €240mn lawsuit against the French energy group Veolia and several other firms for damages to the country's economy. The lawsuit was filed on July 23 with Vilnius Regional Court.

Veolia's investments in Lithuania, the ministry claims, have been marred by controversy and mutual accusations of abuse and murky political influence.

The energy ministry said the lawsuit concerned companies in the Veolia group, including Veolia Environnement, Veolia Energie International, Vilniaus Energija and Litesko, as well as the Icor group and individuals related to these companies.

“It's an unprecedented case in Lithuania and it’s one of the first cases when a state is seeking compensation from a foreign investor and related persons through a civil procedure for damage done to the entire Lithuanian economy…Corruption, influence peddling, unfair and competition-restricting agreements do major economic and reputational damage to a state, therefore, the goal is to receive compensation for damage potentially done through these actions,” the ministry said in a statement.

The new lawsuit takes the demands Lithuania put forward in its counterclaim against Veolia at the International Center for Settlement of Investment Disputes (ICSID) in Washington in 2017 to national courts.

The lawsuit was filed with Vilnius Regional Court after almost all EU member states, including Lithuania and Estonia, signed an international agreement in May, demanding that investors and states withdraw their arbitration claims under bilateral investment protection agreements.

Lithuania is trying to prove that Veolia and Icor used illegal methods to secure lease contracts for heating businesses in a dozen Lithuanian municipalities and illegally profited from heat consumers in 1999-2003.

Veolia took Lithuania to the ICSID in Washington, claiming that its investment in Lithuania was undermined by unfair treatment by the country's politicians and regulatory authorities. It was initially seeking €118mn in damages, but the claim was later reduced to €79mn.

Veolia has not withdrawn its claim from the ICSID yet and the case's hearing has been adjourned until the spring of 2021.

It was reported in March that Vilnius Municipality and the municipal heat supply company, Vilniaus Šilumos Tinklai (VŠT), are seeking €560mn from Veolia, a former operator of the Lithuanian capital's heating sector, at the Stockholm arbitration.