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Cobalt Successful for Gireles Paukstynas Poultry Farm Against Insurer Lietuvos Draudimas

Cobalt Successful for Gireles Paukstynas Poultry Farm Against Insurer Lietuvos Draudimas

Lithuania
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Cobalt has successfully represented Lithuanian poultry farm Gireles Paukstynas before the Supreme Court of Lithuania in a dispute with insurer Lietuvos Draudimas regarding the insurer's refusal to recognize the state-mandated slaughter of sick birds as an insured event.

Gireles Paukstynas is a poultry company. It was established in 1973.

Lietuvos Draudimas is an insurance company active in the Baltic countries. It celebrated a century in the market in 2021. 

The dispute between Gireles Paukstynas and the insurance company "arose after some of the chickens in the company's poultry farms contracted salmonellosis, and the Veterinary Service issued a recommendation to slaughter the sick birds," Cobalt reported, as Lietuvos Draudimas refused to recognize the slaughter of sick chickens as an insured event.

According to the firm, the case would set a precedent for assessing which decisions of state institutions should be regarded as meeting the requirements of the Law on Animal Welfare and Protection. The Supreme Court of Lithuania upheld the company's cassation appeal and overturned the decision of the Vilnius District Court and the ruling of the Lithuanian Court of Appeal against Gireles Paukstynas.

"The SCL decided that the lower courts interpreted the provisions of the insurance regulations incorrectly. The court noted that the recommendation of the Veterinary Service to slaughter flocks of infected chickens can be considered as an order for slaughter, because only in this case would the violation of the requirements of the Law on Animal Welfare and Protection be avoided." According to Cobalt "the recommendation of the Veterinary Service to slaughter the infected birds should be considered an order in the sense of the insurance contract concluded by the parties and the rules applicable to it. Accordingly, the SCL submitted an assessment that in the case in question, Lietuvos Draudimas refused to pay the insurance benefit unjustifiably."

Since the lower courts did not assess the reasonableness of the amount of the requested insurance benefit, the SCL decided to refer the civil case to the court of first instance for re-examination in order to determine the amount of the insurance payment.

The Cobalt team was led by Partner Marius Inta and Senior Associate Vaidas Kontrimas.