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Sorainen Victorious for Alfa Bank in Lithuanian Dispute

Sorainen Victorious for Alfa Bank in Lithuanian Dispute

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Sorainen has represented Alfa Bank in a dispute over loans personally granted by Lithuanian businessman Vidmantas Kucinskas to Arvi NKP, which operates a fertilizer factory in Kaliningrad.

Alfa Bank lent over EUR 10 million to Arvi NKP, according to contracts made in 2012-2014. In 2015 one of the Arvi group companies faced financial problems and Kucinskas agreed to provide an additional guarantee to the bank, taking personal responsibility for fulfilling Arvi NKP’s obligations towards the bank.

However, Sorainen reports, "Arvi NKP and Kucinskas did not fulfill their obligations," and "as a result, Alfa Bank brought an action in the Moscow Meschansk Court on June 9, 2016 and in the London Court of International Arbitration on September 20, 2016. The Moscow Meschansk Court fully upheld Alfa Bank’s action and the court’s decision came into force on January 26, 2017. At the same time Vilnius Regional Court ordered seizure of Vidmantas Kucinskas’ assets worth over EUR 14 million, a decision based on the ongoing process in the London Court of International Arbitration."

According to Sorainen, "it was revealed that the businessman, considered to be one of the richest individuals in Lithuania, might possibly not have assets of such value. Just one day after the decision by the Moscow Court, the majority shareholding in Vyrja, which controls companies in the Arvi group, was transferred to Vidmantas Kucinskas’ son, Justas. Alfa Bank sought to challenge the transfer of Vidmantas Kucinskas’ shares to his son and brought an action before the Kaunas Regional Court, which arrested all the shares that had been transferred to Justas Kucinskas and ordered him not to dispose of the shares or exercise privileges associated with the shares."

On June 9, Sorainen reports, the Kaunas Regional Court upheld Alfa Bank’s civil claim and declared that the transaction by which Vidmantas Kucinskas gifted shares in Vyrja to his son was invalid, as he had "acted in bad faith in respect of the creditor, Alfa Bank."

The Sorainen team advising Alfa Bank included Partner Kestutis Svirinas, Senior Associate Jonas Sakalauskas, and Associate Vita Sabalyte. Alfa Bank was represented in court by Senior Associate Laurynas Lukosiunas.