Supreme Court of Lithuania grants UAB Pontem appeal in cassation

COBALT represented UAB Pontem, a leading Lithuanian catering services provider, in public procurement proceedings for the annulment of decisions of the contracting authority regarding the ranking of tenders and contract award.

On 25 June 2014 the Supreme Court of Lithuania rendered a ruling on the actions of the contracting authority in identifying whether or not the economic operators were related undertakings.

The Supreme Court of Lithuania stated that the Law on Public Procurement does not provide a clear-cut definition of the term of related undertakings and makes indirect reference to the special legal act governing competition law matters without linking the identical term in question solely to concentrations of undertakings. A broader explanation of the term “related undertakings” is provided in the Supplier’s Declaration of Integrity.

In addition, the fact whether or not undertakings are related is determined in view of mutual control as defined in Article 3 of the Law on Competition. The Court held that the courts of first and appeal instances improperly evaluated important data collected in the case, unambiguously assessed the filling in of the Supplier’s Declaration of Integrity and  did not take into consideration undisputed data provided by the claimant and third parties showing that the economic operators are related undertakings. The Supreme Court found that two suppliers, i.e. the third party and the successful tenderer belong to a group of related undertakings, meaning that the tender of the successful tenderer should have been rejected.

The Supreme Court imposed an alternative sanction and shortened the term of validity of the unlawfully concluded contract. The claimant was awarded all the litigation costs.

COBALT drafted procedural documents and represented the client at all stages of pre-litigation and litigation. The project was led by Jolita Rima Puškorienė, Managing Associate, Head of Public Procurement Practice Group.