Lithuania eyes additional funds for Belarusian fertilizer transit disputes

Lithuania is considering an additional allocation of over 600,000 euros to cover legal costs associated with international arbitration cases stemming from its ban on the transit of Belarusian fertilizers. The Ministry of Finance has proposed the funding, which the government is expected to decide on soon.

The proposed funds are earmarked for legal services rendered between January and March of this year. Specifically, 327,500 euros are requested for the 'Belaruskalij' arbitration case, and 305,800 euros for the 'Hasenberg' case. Lithuania implemented a ban on the transit of Belarusian fertilizers in February 2022, citing national security threats posed by the state-owned Belarusian Potash Company ('Belaruskalij'). This decision led 'Belaruskalij' to initiate an investment arbitration process against Lithuania in October 2023, seeking approximately 11.8 billion euros in damages for alleged losses incurred due to the halted transit.

Further complicating the situation, the Swiss company 'Hasenberg,' indirectly controlled by businessman Igor Udovickis, has also initiated arbitration proceedings. 'Hasenberg,' which holds a 65% stake in the Klaipėda Bulk Terminal (BKT), along with a 5% stake held by Udovickis and 30% by 'Belaruskalij,' claims that Lithuania's transit suspension caused significant harm. Media reports suggest 'Hasenberg' could be seeking up to 15 billion euros in damages. Udovickis also benefits from 'Fortis Asset Management,' a Latvian company that owns 100% of 'Hasenberg' shares.

These substantial legal claims add to the significant expenses Lithuania has already incurred. As of February, approximately 2.1 million euros had already been allocated for legal services in these ongoing arbitration disputes. In a related development, the General Court of the European Union recently rejected a lawsuit filed by BKT challenging EU sanctions that impede the transit of Belarusian potash fertilizers through Lithuania.