Prime Minister Gintautas Paluckas has said Lithuania’s long-running legal dispute with French energy giant Veolia has involved significant costs and uncertain prospects, following news of a settlement between the two sides.
His comments came after the Energy Ministry announced on Thursday that Lithuania and Veolia had reached an agreement, effectively resolving most of the legal disputes linked to municipal heating businesses leased to Veolia-owned companies in the country.
“The legal dispute with Veolia has dragged on for almost ten years and cost us nearly 16 million euros, which is a lot,” Paluckas told reporters on Friday. “The prospect of that dispute also needs to be considered, despite the fact that the international arbitration in Washington is looking into this issue, but its rulings are not binding on us as a party, nor on Veolia.”
“For this reason, reaching a settlement under which the state will receive 35 million euros is a really positive outcome,” he added.
Under the agreement, Veolia has agreed to withdraw its case at the International Centre for Settlement of Investment Disputes (ICSID) in Washington and pay 35 million euros in damages to Lithuania. In return, Lithuania will drop its claims against Veolia and its affiliated companies – Veolia Environnement, Veolia Energie International, Vilniaus Energija and Litesko – in domestic courts.
However, the settlement does not include claims against individuals such as former Vilnius mayor Artūras Zuokas, Andrius Janukonis, and Linas Samuolis, or the company Icor, which is not part of the Veolia Group. Proceedings against them will continue at Vilnius Regional Court.
Energy Minister Žygimantas Vaičiūnas said most of the 35 million euro settlement will go towards Lithuanian consumers, supporting Ukraine, and covering arbitration-related costs.
In parallel to the arbitration case, Vilnius Regional Court in May began examining a separate lawsuit brought by the Lithuanian government, which is seeking 240.7 million euros in damages from Veolia, its subsidiaries, and affiliated individuals.
At the time, government lawyers alleged that Veolia and its partners created a scheme to finance corruption, attempted to influence public institutions, profited unlawfully from heating tariffs, and transferred approximately 16 million euros to offshore accounts for fictitious services.
Lithuanian authorities also argue that Veolia and Icor illegally obtained district heating contracts in ten municipalities between 1999 and 2003, profiting at the expense of consumers.
Veolia has rejected the accusations, claiming the Lithuanian government breached the bilateral investment protection treaty between France and Lithuania. The company alleges that it was treated unfairly by Lithuanian politicians and regulators, undermining its investments, which is why it was seeking compensation via the ICSID tribunal.
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