The court has not yet ruled on the legality of the termination of the Vilnius waste treatment plant contracts. The plant operator, Energesman, maintains that both the operating and modernization contracts remain valid and that their termination is unlawful, as there are no substantial grounds for doing so. Separate legal actions will be filed challenging the termination of these contracts.
The decision of the Vilnius Regional Court not to apply interim measures regarding the contract termination is based on decisions adopted by the Emergency Operations Centre (ESOC) and its Head (ESOV), an institution subordinate to the Vilnius City Municipality. Those decisions have already been appealed before the Regional Administrative Court.
“The courts are being misled because the ESOC and ESOV decisions present distorted information. This is a political institution currently headed by Dalius Krinickas, who is the mayor’s right-hand man in this market redistribution process. They adopt whatever decisions they wish, and those decisions immediately acquire legal force,” says Algirdas Blazgys, CEO of Energesman.
The decisions adopted by the Vilnius ESOC and ESOV are, in Energesman’s view, non-objective and discriminatory toward other regions and market participants that are not politically favoured. Recently, the Vilnius ESOC decided that the Vilnius cogeneration plant should not accept waste from the Alytus and Utena regions for incineration, a decision to which both regions have already expressed opposition. The Elektrėnai Municipality, where the Kazokiškės landfill is located, has also objected to the Vilnius ESOC decisions.
“The Vilnius ESOC and ESOV are exceeding their powers, because under the Law on Civil Protection a municipal-level emergency situation does not give the centre the authority to alter contractual relations. Nevertheless, courts must rely on these decisions until they are annulled, because they have been issued by an official public authority. This is precisely why we are simultaneously challenging all ESOC and ESOV decisions in court, as they currently form the basis for the entire situation,” says Dr Paulius Miliauskas, attorney-at-law and partner at the law firm Miliauskas ir Lauraitytė.
Under the waste treatment plant operating agreement, the contract may be terminated only if two conditions are met: there must be substantial grounds for termination and the other party must be given at least 20 working days’ notice.
“In our assessment, VAATC has failed to identify substantial grounds that would justify unilateral termination of the contract. We therefore consider the operating agreement to remain in force. The final decision on this matter will be made by the court,” says Dr Miliauskas.
If the court determines that one or both contracts with Energesman—the plant operating agreement and the modernization agreement—were terminated unlawfully, VAATC will be obliged to compensate the losses incurred. According to preliminary estimates, those losses amount to approximately EUR 20 million. The losses may continue to increase as the period during which VAATC has taken over the plant becomes longer.