Srbijagas sues Lithuania in international arbitration over Azotara plant dispute

Serbia's state-owned energy company, Srbijagas, has launched an international arbitration case against Lithuania. The company alleges that Lithuania's judicial system has undermined previous arbitration awards through extensive delays, thereby devaluing multi-million euro judgments in Srbijagas' favor.

The core of the dispute involves the privatization of the Azotara Pančevo fertilizer plant. Srbijagas claims that prolonged legal delays in Lithuania have prevented it from recovering significant sums. The company estimates its potential claims, including interest and legal costs accumulated over years of litigation, could reach up to 20 million euros.

The legal battle traces back to 2006 when a consortium of Lithuanian companies acquired Azotara Pančevo. However, the partnership soured, leading Serbia to terminate the privatization agreement in 2009 due to alleged breaches of contract by the investors. This termination triggered the first major international arbitration.

In that initial arbitration, Lithuanian investors sued Serbia, seeking over 50 million euros. An international tribunal ruled in their favor, ordering Serbia to pay approximately one million euros. Srbijagas is now pursuing Lithuania directly, citing a 2005 bilateral investment protection agreement, as the original Lithuanian businessmen involved have since gone bankrupt.