2022.01.25 15:14

Belaruskali demands damages from Lithuanian Railways for contract termination

Roma Pakėnienė, BNS2022.01.25 15:14

The Belarusian state-owned potash manufacturer Belaruskali says it intends to demand damage compensation from Lithuanian Railways (LTG) which is terminating transportation contract on February 1.

The Lithuanian government has terminated the contract on transporting Belarusian fertilisers across the country, quoting national security. Belaruskali has been under US sanctions since last December.

Read more: Lithuanian government decides to terminate Belaruskali contract in February

LTG has confirmed to BNS that it has received a letter from Belaruskali, in which the Belarusian company demands that the Lithuanian state-owned company execute existing contractual commitments.

“The Belarusian company states that, in case of a violation of the contract by LTG, it has the right to demand compensation for all incurred damages, including direct losses, as well as potential compensation for direct and indirect partners in all countries in the world, as well as compensation for lost revenue. The letter does not indicate the value of potential lawsuits,” LTG told BNS.

The Belarusian company has been ignoring BNS requests for comment recently.

Last week, LTG said it officially notified Belaruskali on January 17 about the Lithuanian government's decision to terminate LTG's contract from February 1.

The government hopes its decision will help avoid major losses, if Belaruskali turns to court.

Former LTG CEO Mantas Bartuška said earlier that LTG might face lawsuits worth hundreds of millions euros and even bankruptcy, if Belaruskali sued the Lithuanian railway company.

Signed in the spring of 2018, LTG's contract with Belaruskali is set to expire in late 2023. Under the contract, some 11 million tons of Belarusian fertilisers are transported across Lithuania to the port of Klaipėda every year.

Belaruskali product shipments via Lithuania did not stop after the US sanctions came into force on December 8. The US sanctions, announced in early December, for Belaruskaya Kaliynaya Kompaniya (Belarusian Potash Company, BKK), an export subsidiary of Belaruskali, will come into force on April 1.

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