ARBITRATION IN LITHUANIAN COMMERCIAL AGREEMENTS: ESTABLISHMENT AND EARLY DEVELOPMENT

Patricia A. Streeter
Copyright © 1999, 2000 Patricia A. Streeter
July 29, 1999
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Overview

I.   INTRODUCTION

II.  ARBITRATION LAW IN LITHUANIA

     A. Lithuania's ExperienceWith Commercial Arbitration

     B. The Law on Commercial Arbitration Compared to the UNCITRAL Model Law
         1. Determining National or International Commercial Arbitration
         2. Exclusions
         3. Commercial and NonCommercial Disputes
         4. Institutional and Ad Hoc Arbitration
         5. Tribunal Powers For Granting Temporary Relief
         6. Appeal of Arbitral Awards
         7. The Effect and Enforcement of Arbitral Awards
         8. Recognition and Enforcement of Foreign Arbitral Awards
 
C. LITHUANIAN ARBITRATION INSTITUTIONS
         1. Vilnius International Commercial Arbitration
         2. Court At the Association International Chamber of Commerce - Lithuania

III. SYSTEM-WIDE OBSTACLES TO IMPLEMENTATION

IV.  INTERNATIONAL ARBITRATION:  VIEWS FROM LITHUANIA

IV.  CONCLUSION
_________________________________________________________________


I. INTRODUCTION

Lithuania's economic transition from a centrally-planned to a market economy continues to be complicated by the need to implement its new institutions and legal framework for an independent state.(1) Motivated by its desire to become a trading partner with the West, Lithuania has passed a number of pieces of legislation to support a functioning market economy. In the area of international commercial contracts, Lithuania became a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the 1958 New York Convention) by ratification of the Seimas (Parliament) on January 17, 1995. Seimas also provided that reciprocal effect will be given to contracts made with states not a party to the New York Convention.(2) In 1996 Lithuania adopted a law on commercial arbitration patterned after the UNICTRAL Model Law on International Commercial Arbitration (UNCITRAL Model Law). In addition, two international associations were established, Vilnius International Commercial Arbitration (VICA) in 1986, and the Association International Chamber of Commerce Lithuania (AICC) in 1998.

This paper reviews arbitration law in the Republic of Lithuania over the past several decades, including the recently enacted Law on Commercial Arbitration and potential obstacles to effective enforcement of arbitral awards, and some Lithuanian observations on arbitration provisions in international commercial contracts. What began as a search for background for a hypothetical international commercial dispute has revealed that, while there are new laws and associations to facilitate arbitrations of international disputes and enforcement of foreign arbitral awards in Lithuania, they remain unproven. For this project, the primary Lithuanian law adopting the UNCITRAL Model Law was not available in English, although some analysis of its various provisions were. English translations of the rules of the two international arbitration associations in Lithuania, VICA and AICC, were available after some time. The full extent to which Lithuanian businesses and law firms use arbitration clauses in their international contracts, or what provisions they use, was also difficult to evaluate, except on an anecdotal basis.

It is well accepted that to attract commercial enterprise, a country must provide clarity in its laws and provide an effective means of settling commercial disputes.(3) The Baltic region in which Lithuania(4) is located is considered by international business observers as crucial to the economic prospects of half of the continent and a link between prosperity on the West and poverty on the East.(5) While each country in the region now has democracy, they do not necessarily have the rule of law necessary to support a free market economy.(6) Lithuania must continue its efforts to establish the kind of legal culture that will support a market economy.

The existence of the new laws and courts of international arbitration in Lithuania provide foreign commercial partners with a framework for arbitration as an international means of dispute resolution in Lithuania. Lithuanians hope that these measures evidence their commitment to a market economy and the Western-style of doing business. It remains to be seen, however, whether and how the concept of arbitration, largely unknown even to its judiciary, will be integrated into Lithuania's market place.(7) For this reason, and those that follow, Western investors and joint venture partners are advised to carefully draft arbitration clauses into every contract. Vital issues include the location and the language of the arbitration, the number of arbitrators and the means of their appointment, the choice of law governing the substance of the dispute, and the rules that will govern the arbitration.(8)

II. ARBITRATION LAW IN LITHUANIA

A. LITHUANIA'S EXPERIENCE WITH ARBITRATION

International arbitrations in formerly socialist countries in Eastern Europe, including Lithuania, were conducted through arbitration courts administered by the chambers of commerce of the government.(9) The Moscow Convention of May 26, 1972, mandated that member states were committed to arbitrate all commercial disputes between parties of different member states before an appropriate arbitral institution.(10) The use of these arbitration courts was expanded under the influence of the Council for Mutual Economic Assistance (CMEA). In 1974 the C.M.E.A. adopted uniform rules of procedure for arbitration before the courts in the chambers of commerce for application to arbitrations between parties C.M.E.A. members. The rules were designed to ensure equal treatment of litigants before each court and to simplify some judicial procedures.(11)

Western-style arbitration is relatively new in Lithuania. Commercial disputes are currently most commonly adjudicated through the courts. Dispute resolution by means of arbitration is a comparatively new idea in the Republic of Lithuania; however, it is quickly gaining popularity and trust among commercial entities.(12)

The two major pieces of legislation that established current arbitration law in Lithuania are relatively new, both only in effect since 1996. On April 2, 1996, the Republic of Lithuania adopted the law "On Commercial Arbitration" ("the Law on Commercial Arbitration), Law No. I-1274.(13) The Law on Commercial Arbitration follows the UNCITRAL Model Law on International Commercial Arbitration (UNCITRAL Model Law), with significant differences, discussed below. Later, on June 21, 1996, regulations were established for registration of arbitral entities, in "Regulations on the Registration of Commercial Arbitration Statutes", Order No. 43 of the Minister of Justice.(14)

In addition, two competing associations have organized the first commercial arbitral institutions in Lithuania, the Vilnius International Commercial Arbitration Tribunal (VICA) and the International Chamber of Commerce (ICC).

B. THE LAW ON COMMERCIAL ARBITRATION COMPARED TO THE UNCITRAL MODEL LAW

Lithuania's Law on Commercial Arbitration differs from the UNCITRAL Model Law in, among other things, applying the law to both national and international disputes, how a dispute is determined to be national or international, the exclusions it allows, and providing application to commercial and non-commercial disputes. It has been criticized for its exclusions, that expressly exclude many of the kinds of claims common in commercial cases. Before reviewing the following discussion, consider the following series of events.

JCC v. VK: A Hypothetical Case

Sarah Jones is a computer programmer, and owns and operates Jones Computer Consulting, (JCC), a computer software consulting company in the United States. She is interested in expanding JCC's operations overseas, and on January 1, 1998 posted her company's availability for international software service consultation on JCC company's web site.

On February 14, 1998 she is contacted by Vyto Knygas, a publishing company in Vilnius, Lithuania, that seeks to hire JCC to redesign its publishing software. Unknown to JCC, VK, which also publishes manuals and materials for the Lithuanian military, is ninety (90%) percent subsidized by the Lithuanian government. After confirming the quality and dependability of the services that JCC can provide, VK also sought an additional four-year exclusive consulting relationship with JCC to service the new software and make any adjustments VK may request to begin running from the date the parties' agreement would take effect. Each service request was to be made by VK's business manager, Jurate Yanushas.

On March 3, 1998, JCC received a proposed contract from VK setting forth the terms of the agreement, including the nature of the services to be provided, and manner of payment. Ms. Jones had traveled several times to Lithuania. She knew that the country was actively seeking to become a Western-style market place. She was generally aware that Lithuania had recently adopted a UNCITRAL model law on commercial arbitration. She proposed that an arbitration paragraph be added to the proposed contract. VK agreed, and sent an amended proposed contract that provided: "Any dispute, controversy or claim arising out of or relating to this contract shall be settled by arbitration according to the Vilnius International Commercial Arbitration rules." Ms. Jones agreed, and the parties both signed the contract to take effect on April 15, 1998.

The initial phase of the contract was completed by the end of July, 1998, and the new programs were performing well. On September 3, 1998, Ms. Yanushas sent an email to JCC requesting changes to the programs, and over the next several months made repeated requests to assist in program implementation and training of VK personnel in charge of the programs. JCC was pleased to assist, because most of the work could be done on-line remotely by computer, and the travel that was involved was well-compensated for in the parties' agreement. The billings from JCC to VK had steadily averaged US$20,000 each month from September 3, 1998 to November 30, 1998. This work was lucrative for the JCC, and involved enough on-site work that JCC maintained its own equipment valued at US$45,000 at the VK facilities. Business was so good, that in October of 1998 JCC relocated its business to Lithuania to service VK, its only client. This relationship continued through the balance of 1998. No service requests were made by VK after December 1, 1998. On February 10, 1999, Ms. Jones was surprised to hear through a friend that a local Lithuanian firm, Vagis Firma, had been servicing this account, using JCC's equipment, since December 1, 1998.

On February 12, 1999 Ms. Jones sent a letter to Ms. Yanushas, advised her that there was a material dispute in their contract, and demanded arbitration. On February 14, 1999 Ms. Yanushas responded, claiming that it is not required by the Lithuanian Law on Arbitration to arbitrate.

On these facts, here are some questions to ponder about the application of the Lithuanian Law on Commercial Arbitration:

a. Is there an adequate arbitration agreement?
b. If so, is this a national or international dispute?
c. On what basis would Vyto Knygas assert that it is not required  to arbitrate?
d. What temporary relief is available in arbitration?
 

Although an English-language version of the Law on Commercial Arbitration was not available for this paper, several sources(15) were located that provided descriptions of the differences between the UNCITRAL model law, and the Lithuanian version (the Law on Commercial Arbitration). This material provides the basis for the following discussion.
 

1. Determining National or International Commercial Arbitration

Unlike the UNCITRAL Model Law, the Law on Commercial Arbitration applies to both national and international arbitration and allows an otherwise national dispute to be treated as international if one or both parties to the dispute are Lithuanian economic entities in which foreign capital is invested.(16) See para. f., below. This provision applies if the location of the arbitration is in the territory of the Republic of Lithuania, or if separate procedural actions are taken within its territory.(17) Under the Law on Commercial Arbitration, commercial arbitration is national if it is to resolve a dispute between economic entities of the Republic of Lithuania. According to Lithuanian law firm doing international business law, the LCA defines a case appropriate for international commercial arbitration if:

a. The parties have their places of business in different states at the time the arbitration agreement is concluded;
 

b. The place of arbitration, determined either in the arbitration agreement or during discussions in any other way corresponding to the arbitration agreement, is situated outside the state in which the parties have their places of business;
 

c. The location where a substantial part of the performance of the obligations arising from the commercial relations the parties to it is situated outside the state in which the parties have their places of business;
 

d. The place most closely connected with the subject-matter of the dispute is situated outside the state in which the parties have their places of business;
 

e. The parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country; or
 

f. One or both of the parties to the dispute are Lithuanian economic entities in which foreign capital is invested.(18)
 

For a non-Lithuanian party, the significant implications between a dispute being national and international are in the language to be used and choice of law to be applied. If a dispute is deemed a case for national commercial arbitration, it will be tried in the Lithuanian language according to national commercial arbitration laws. If the case involves an international dispute, the parties may agree on the language or languages to be used in the proceedings, and the tribunal will apply the law determined by the conflict of law rules it deems applicable, unless the parties have designated otherwise.(19) In the example of JCC v. VK, this would be considered a matter for international arbitration, because even though both companies were entities of the Republic of Lithuania at the time of the dispute, the determination is made on the basis of where they were located at the time the arbitration agreement is entered into. Para. a, above. Another consideration is whether, despite the move to Lithuania, JCC is considered as a foreign investment. Again, without a body of commercial law or history of arbitration decisions, it is difficult to predict how such issues would be resolved.
 

2. Exclusions

The Law on Commercial Arbitration defines a commercial dispute as a controversy between parties arising from a contractual or non-contractual legal relation.(20) The law expressly excludes many types of claims common in commercial cases. Article 11 (1) of the law excludes "disputes arising from constitutional, labor, family and administrative legal relationships. Given the lack of development in constitutional construction, that all businesses are considered as involving labor, and many commercial matters are still handled administratively, there is concern that these exclusions will be exploited to avoid the arbitration process.(21)

The law also excludes "disputes relating to competition, patents, trade and service marks and bankruptcy". In addition, "consumer agreements" are excluded, without defining a consumer agreement.(22)

Another significant exclusion is for disputes in which one of the parties is "a state-owned or local government owned enterprise, at Article 11(2).(23) This provision could be a barrier to arbitration under this law in unexpected ways. In Lithuania, the state maintains ownership in almost all of the banks and other established joint stock companies.(24) Indeed, lack of transparency in state ownership and state subsidies of many of Lithuania's major market areas has been as obstacle to accession to the EU.(25) These same practices may, unknown to a foreign contracting party, create an unwanted exception to this law. In the example of JCC v. VK, VK may claim that its ninety (90%) percent majority ownership by the state excludes it from the arbitration process. The question of course is how much ownership interest will allow it to be excluded. Without a history of arbitration decisions or a body of commercial law, it is difficult to predict how this argument would be resolved.
 

3. Commercial and Non-Commercial Disputes

The Law on Commercial Arbitration applies to the resolution of commercial disputes. As defined in Article 2 of the Law on Commercial Arbitration a commercial dispute is a controversy between parties arising from contractual or non-contractual legal relations, but does not include disputes that may not be submitted to arbitration under applicable Lithuanian law. Article 11 indicates that the following disputes may not be submitted to arbitration: disputes involving issues of constitutional, employment, family or administrative law; disputes connected with competition law, patents, trademarks and service marks, or bankruptcy law; and disputes arising between retailers and consumers. In addition, disputes in which state or municipal enterprises, or state or municipal institutions or organizations, are a party may not be submitted to arbitration unless advance consent to arbitration has been given by the founder of such enterprise, institution or organization
 

4. Institutional and Ad Hoc Arbitration

The Law on Commercial Arbitration recognizes both institutional and ad hoc arbitration. According to Article 3 of the Law On Commercial Arbitration, Lithuanian public organizations which represent Lithuanian economic entities engaged in industry, business and legal activities (for example, a chamber of commerce or trade association) are entitled to establish separate legal persons (permanent arbitration institutions),with the permanent function of organizing and accommodating arbitration, and other functions as agreed by the parties.

In the example of JCC v. VK, the arbitration provision, while missing many of the preferred details such as the number of arbitrators, is an adequate provision to require arbitration under Lithuanian law.(26)
 

5. Tribunal Powers For Granting Temporary Relief
 

Unlike Article 17 of the UNCITRAL Model Law that allows interim measures to include preserving the goods at issue or making an interim award, Article 20 of the Law on Commercial Arbitration limits interim relief to requiring a security deposit and seeking a temporary injunction from the District Court in which the tribunal operates.

This means that, if arbitration is required in the example of JCC v. VK, JCC might seek and obtain an injunction, but would not be able to recover any interim damages to sustain her business pending the arbitration and perhaps civil litigation that might precede it.

6. Appeal of Arbitral Awards

Under Article 37 of the Law on Commercial Arbitration allows an appeal of an arbitration award to the Lithuanian Court of Appeal on the same procedural grounds as provided in Article 34 of the UNCITRAL Model Law.

7. The Effect and Enforcement of Arbitral Awards

Under the Law on Commercial Arbitration, an arbitral award is in effect from the moment it is made and must be enforced by the parties. When an arbitral award takes effect, the parties to the dispute no longer have the right to initiate action on the same subject and on the same grounds. If one party refuses to implement the award, the other party shall have the right to petition the District Court operating in the same location as the tribunal for a writ of execution. The court may refuse to issue a writ, pursuant to the rationale established in Article 5 of the 1958 New York Convention. Arbitral awards are enforced as prescribed by the Code of Civil Procedure of the Republic of Lithuania.(27)
 

8. Recognition and Enforcement of Foreign Arbitral Awards

An arbitral award made in any State which is a party to the 1958 New York Convention is recognized and enforced in the Republic of Lithuania according to the provisions of the Law on Commercial Arbitration and the 1958 New York Convention. The party requesting recognition and enforcement of a foreign arbitral award shall supply the Lithuanian Court of Appeal with the original authenticated award or certified copy, together with the original arbitration agreement or certified copy. If the arbitral award or arbitral agreement is not made in Lithuanian, the party shall supply a certified translation of the document into the Lithuanian language. Recognition or enforcement of an arbitral award, irrespective of the country in which it was made, may be refused in the Republic of Lithuania only on the grounds contained in Article 5 of the 1958 New York Convention. Recognized foreign arbitral awards shall be enforced in Lithuania as prescribed by the Code of Civil Procedure of the Republic of Lithuania.(28)

C. LITHUANIAN ARBITRATION INSTITUTIONS

There are two International Commercial Arbitration courts in Lithuania: Vilnius International Commercial Arbitration Court, founded in 1996 and the Arbitration Court at the Association of the International Chamber of Commerce, founded in 1998.(29) They each have their own rules.
 

1. Vilnius International Commercial Arbitration

The Court of the Vilnius International Commercial Arbitration (VICA) was established by statute on July 3, 1996 on the initiative of the Lithuanian lawyers' Association. Its rules of procedure were adopted on October 7, 1996. It organizes arbitral proceedings in commercial and other property disputes arising from international contracts and non-contractual (tort) civil relationships. It will also arrange mediation and conciliation proceedings when the parties request it, according to VICA's procedural rules, the UNCITRAL Model Law, or other rules as agreed upon by the parties. According to one observer, VICA has arbitrated only four cases to date.(30)
 

2. Court At the Association International Chamber of Commerce - Lithuania

The Rules of the Association International Chamber of Commerce - Lithuania (AICC) were adopted on April 2, 1996. They provide that, if the parties agree, they will apply to both national and international business disputes.

The arbitration institutions in Lithuania have been criticized for their lack of a solid operational background, but are considered to provide inexpensive and prompt dispute resolution.(31) Despite the complaints and potential shortcomings in their provisions for arbitrating international disputes, many Lithuanians hope to establish reputable arbitration institutions so that foreign companies will see commercial benefits in arbitrating there.(32)
 

III. SYSTEM-WIDE OBSTACLES TO IMPLEMENTATION

As in other countries of the former Soviet Union, government bureaucracy, corruption and organized crime are often cited as the most significant hurdles to trade and investment in Lithuania.(33) While the Lithuanian Government and the major political parties support a free-market system, Soviet methodology and regulatory traditions remain evident at lower levels of the bureaucracy.(34) Since 1990, Lithuania has implemented reforms aimed at eliminating the vestiges of the former socialist system. With the help of the International Monetary Fund (IMF) and other international institutions, the government has adopted programs to restrain inflation, reduce price controls, lower the budget deficit, and privatize the economy.(35)

Lithuania is now entering a phase where the proper implementation and enforcement of its new laws are just as important as the laws themselves.(36) Lithuania has indicated it will address deficiencies in areas that are of special significance to enforcement of competition law, including its legal system and competition policy.

The European Commission (EC) evaluated Lithuania's suitability for accession to the EU, and found that Lithuanian courts take too long to deliver their judgments. This is largely due to a shortage of qualified judges and to the 1995 reform of the judiciary, which created a four-tier judicial system. Commercial cases are particularly seriously affected, as the bottleneck obstructs the application of the law on bankruptcy.(37) The Procurator's (prosecutor's) Office is overloaded with work because its powers have not been clearly defined. This, in turn, adds to the delay in legal proceedings.(38)

According to Thomas Welch, an attorney who served as an International Arbitration Specialist for the Central and Eastern European Law Initiative Program (CEELI) of the American Bar Association, there is a more intrinsic reason that there will be problems in judicial enforcement of arbitration awards in Lithuania. That is that Western-style arbitration is largely unknown to the judiciary.(39) In his 1997 article, he indicates that there had been only one reported recognition of a foreign arbitral award by the Lithuanian Ministry of Justice, and that award resulted from an arbitration between a Swedish company in a joint-venture with a Lithuanian government-owned entity. He argues that because the parties settled the case, it has little precedential value.

Even if an arbitration award is recognized, court enforcement against a privately owned stock company is difficult. Local police are so poorly equipped to enforce court judgments, only ten (10%) percent are satisfied in civil cases. There is no security interest registry, and commercial law is so under-developed that there is no compulsory post-judgment procedures to prevent diversion of assets to avoid a judgment. Most foreign direct investors, rather than rely on untested commercial arbitration and expecting that any personal property will escape execution of judgment, secure their interests by a confession of judgment agreement on any real property involved.(40)

IV. INTERNATIONAL ARBITRATION: VIEWS FROM LITHUANIA

It is reported that large businesses choose arbitration as their means of dispute resolution, but usually at the request of their foreign partner. Otherwise, Lithuanian businesses generally prefer litigation in Lithuanian courts because it is less expensive and more familiar.(41)

When arbitration clauses are provided, they a relatively simple. For example, the model arbitration clause proposed by VICA provides:

    Any dispute or misunderstanding related to this contract, and which cannot be solved by direct negotiations of the parties, is to be handed over for judgement by one of the several arbitrators appointed under the Rules of Arbitral Procedure of the Vilnius International Commercial Arbitration (VICA).
     

This provision is typical of most provisions used in Lithuania, it indicates that if any dispute or difference arises out of the present contract or in connection with it, the parties will strive to settle by negotiating. Then, if the Parties do not come to an agreement it is provided that there will be arbitration and by what rules the arbitration will proceed. It is also common that the arbitration award will be binding on both Parties.(42)

Most arbitration rules written into an agreement are selected based upon the location in which the parties want any arbitration to proceed. One of the most popular in Lithuanian contracts is the Stockholm, under the rules of the Stockholm Chamber of Commerce. Lithuanians also choose Moscow, London, and Tallin International Commercial Arbitration and, respectively, their rules. At the present time it is rare for a Lithuanian contract to specify the rules of the UNCITRAL Model Law, even though they are recognized by Lithuanian scholars as advanced.(43)

If the dispute arises from a contract containing a valid arbitration clause and the party brings an action, under Lithuanian law, the court must decline to settle the dispute and refer it to arbitration (Civil Procedure Code Art. 150). In order for an arbitration provision to be upheld in a Lithuanian court, it must specify the rules or location of the arbitration. A party's request for provisional remedies is not treated as renunciation of its agreement to arbitrate.(44)
 

V. CONCLUSION

Lithuania has made significant steps since 1990 toward a free market economy. To fully succeed, it needs to encourage and sustain foreign investment. Recent adoption of legislation on commercial arbitration and enforcement of foreign arbitral awards is a significant step in the right direction. Additional steps are needed to ensure that the principles upon with these laws are based become integrated into its economic and judicial system.

To be in the best position to benefit economically from its geographic location, between the East and the West, Lithuania must make significant efforts to foster understanding and acceptance of the various arbitration laws it has passed. In the meanwhile, potential investors and joint venture parties seeking to invest or conduct business in Lithuania are advised to give special attention to dispute resolution provisions in their formation agreement and other contracts.

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ENDNOTES:

1. Commission Opinion on Lithuania's Application for Membership of the European Union(hereinafter 1997 EC Opinion), Section B.2.1, The Economic Situation. This Opinion is a comprehensive evaluation of Lithuania's readiness to join the European Union (EU), published in 1997 as a part of its "Agenda 2000" to prepare countries for membership. It is available on the Internet through the EU home page, Europa, at: <http://europa.eu.int>/comm/dg1a/enlarge> . The conclusions of the June 1993 European Council (EC) in Copenhagen established the guidelines for examining the economic situation and prospects of Lithuania for membership in the EU, which requires "the existence of a functioning market economy, as well as the capacity to cope with the competitive pressure and market forces within the Union". 1997 EC Opinion.

2. The Lithuanian Law Firm, unnamed for purposes of this publication, "Settlement of Disputes" at their firm web page (visited July 17, 1999).

3. Mary Theresa Kaloupek, Drafting Dispute Resolution Clauses For Western Investment and Joint Ventures In Eastern Europe, 13 Mich.J. Int'l L. 981 (1992), p. 982.

4. Lithuania is the southernmost of the three Baltic Sea States on the Eastern shore with a population of 3.8 million (1995). Country Commercial Guide, Fiscal Year 1998 (CCG 1998). The CCG is a review of Lithuania's commercial environment with economic, political and market analyses. CCGs are prepared for the U.S. business community at U.S. Embassies through the combined efforts of several U.S. Government agencies. Available at <">http://www.iep.doc.gov>.

5. 5. "The Baltic Revolution", The Economist, April 18, 1998.

6. Id.

7. Thomas W. Welch, Recent Developments in Commercial Arbitration in the Republic of Lithuania, 3 Int. L.Up. 71 (1997), p. 71.

8. Kaloupek, supra, note 3 at 983.

9. Id. at 984.

10.  Id. at 985.

11.  Id.

12.  Lithuanian Law Firm, supra, note 2.

13.  Id.

14.  Lithuanian Law Firm, supra, note 2.

15.  These included a 1997 article from the International Law Update, material posted on the Internet by a Lithuanian commercial law firm, supra at note 2, and responses to my correspondence to the law same law firm and to a masters student at the Law School at the Vytautas Magnus University, in Kaunas, Lithuania. These sources are cited throughout this paper.

16.  Lithuanian Law Firm, supra, note 2.

17. Id.

18. Id.

19. Id.

20. Id.

21.  Welch, supra, note 3 at 71.

22.  Id.

23.  Id.

24. Id.

25.  Lithuania's state monopolies of commercial operations of alcoholic beverages, tobacco products, sugar, metals and scrap metal remain an obstacle to Community compliance with competition policy. Licensing requirements for production, distribution and imports in these sectors raise may be in breach of the European Community's competition rules. EC Opinion, COM(97) 2007 final, supra, note 1.

26.  Reported to the author by a graduate law student (unnamed for this publication) at the Vytautas Magnus University Law School in Kaunas, Lithuania, in correspondence dated July 1, 1999.  She recently completed her master's thesis on the enforcement of arbitral awards in Lithuania.

27.  Lithuanian Law Firm, supra, note 2.

28.  Id.

29. There is a third arbitration institution for domestic conflicts only, the "Vilnius National [Institution for] Commercial Arbitration" (established in 1998). Id.

30.  Correspondence, supra, note 26.

31. 

32.  Welch, supra, note 7, at 72.

33.  CCG 1998, supra, note 4.

34.  Id.

35.  Privatization however, has proven much more complex then simply putting state assets into the hands of private parties. Mass privatization programs initially led to either inside ownership of workers and manages or was dispersed to outside ownership. "Europe Struggles With Privatisation and Liberalisation", European Dialogue: May-June 1997, Issue 3: Ownership. European Union (also available through the web site of the European Union, Europa, supra, note 1).

36.  Report on the Comments of EU Commissioner Hans van den Broek on his April 2-4, 1997 visit to Latvia and Lithuania in his speech at the Old Town Hall, Vilnius, "Van Den Broek In Lithuania and Latvia", Together in Europe, European Union Newsletter for Central Europe, Number 107, April 15, 1997, (also available through the web sit of the European Union, Europa, supra, note 1).

37.  EC Opinion, supra, note 1.

38.  Id.

39.  Welch, supra, note 7 at 71.

40.  Id.

41.  Correspondence, supra, note 26.

42.  Id.

43. Id.

44.  Id.

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