REVERA law group Secures Another Victory in Vilnius Court of Commercial Arbitration (VCCA) in Software Development Contract Dispute
We are delighted to announce another triumph for the arbitration team at REVERA Law Group, who successfully defended the interests of a British fintech company in a dispute before the Vilnius Court of Commercial Arbitration (VCCA). The case involved the recovery of damages from a Lithuanian company under a software development contract, specifically related to non-delivery of results and blocking access.
The UK-based company had engaged the services of a Lithuanian developer to create and customize software for their online lending operations. As per the contract, the Lithuanian company was responsible for performing the development work, delivering the final product, and granting a non-exclusive license for software usage. Over the course of approximately one year, the Lithuanian company undertook the development work, and the UK company duly made the necessary payments. However, disagreements arose between the parties regarding the timeliness and quality of the work performed.
Due to a payment delay, the Lithuanian company (the Respondent) ceased further development work and blocked the Claimant's access to the repository where the work was stored.
Following unsuccessful pre-trial negotiations, the UK company decided to pursue arbitration to resolve the dispute.
Arbitral Proceedings at VCCA
The Claimant initiated proceedings under the auspices of the Vilnius Court of Commercial Arbitration (VCCA), seeking recovery of all payments made for the software development. In response, the Respondent filed a counterclaim to recover the outstanding debt.
Based on Lithuanian law, the REVERA Law Group arbitration team successfully argued before the court that the failure to deliver the results and the subsequent blocking of access by the Respondent completely undermined any benefits the Claimant could have derived from the contract. The court ruled that the Respondent's complete obstruction of the Claimant's access to the deliverables was disproportionate to the Claimant's debt. Consequently, the court dismissed the Respondent's counterclaim for debt recovery.
VCCA as an Arbitral Institution
The Vilnius Court of Commercial Arbitration is widely recognized as one of the premier arbitration institutions in Eastern Europe. Notably, it boasts relatively low arbitration fees and embraces a high level of digitalization in the dispute resolution process.
The court actively employs the Arbis online platform, which facilitates communication between the parties and the arbitrator, exchange of procedural documents, and scheduling of sessions. Each case has its dedicated file card, where all correspondence, case progress, documents submitted by the parties, the secretariat, and the arbitrator are stored. Claimants have the option to choose the format of proceedings, either utilizing Arbis for a completely paperless process or opting for traditional "paper-based" proceedings.
According to VCCA statistics, as of 2021, all cases are exclusively conducted through the Arbis system, reflecting the general trend towards electronic arbitration.
We commend our esteemed team, led by Kamal Terekhov, Andrej Rutkovskij, and Kristina Vainilovich, for their exceptional advocacy and commitment to securing a favorable outcome for our client.
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