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Wednesday 22.05.2019 | Name days: Emīlija
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Vitol Group concerned over state of rule of law in Latvia; turns to state officials

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUOne of the largest energy resource traders in the world – Vitol Group – has sent a letter to Latvia’s highest ranking officials, expressing deep concern over the rule of law and application of legislative acts in the litigation between LatRosTrans and Polocktransneft Druzba over the EUR 66 million worth technological oil.

Vitol Group indirectly owns 66% of LatRosTrans shares.

As BNN was told by the company’s representatives, in its letter to Latvia’s state officials, Vitol Group asked them to secure competent, professional and transparent review of this litigation in the court justice system of the Republic of Latvia to prevent violations of investment protection principles, as well as possible threats to national security.

«Following the restoration of Latvia’s independence, both the pipeline and the technological oil that was contained there on Latvia’s territory became state property in accordance with legislation of the Republic of Latvia. After the foundation of LatRosTrans, legislation stated that these assets are part of the company’s capital as its property. When Latgale Regional Court was making its decision regarding the ownership of this oil, the judge did not take into account the decision made by the Supreme Council, which stated that all businesses and civilian objects that were formally owned by USSR in the past and were registered or located on territory of the Republic of Latvia became state property if international agreements did not decide otherwise. Instead, when making its decision, the court referenced entries from the company’s accounting balance entries left from USSR,» said Vitol Group representative and LatRosTrans council chairman Robert Kirkup.

Vitol group believes Latgale RegionalCourt has ignored Latvia’s legislation by making interior, former USSR documents as a priority. On top of that, Latgale Regional Court has not taken into account documents submitted by Latvia’s Foreign Affairs Ministry and Saeima Legal Affairs Office, which conform that the oil pipeline is located on Latvia’s territory and the oil contained in it is to be considered Latvia’s property, considering that the country has not voiced any intentions to transfer this asset to a different owner.

LatRosTrans has decided to appeal the ruling of Latgale Regional Court. Vitol group expects the Supreme Court to pay more attention to this case.

«If the ruling of Latgale Regional Court comes to force, it will create a legal precedent that could allow third parties to exact control over assets important to the country’s independence, security and economic welfare, such as Inčukalns underground gas storage facility, AS Sadales tīkls infrastructure, Daugava hydro-electric dam and infrastructure associated with it. Inability to review this case using all the evidence could result in assets important to state economy’s independence and security to be handed to another country. In this case – Belarus,» says Vitol Group representative Robert Kirkup.

Vitol Group has sent a letter to Prime Minister Māris Kučinskis, Economy Minister Arvils Ašeradens, Justice Minister Dzintars Rasnačs, Foreign Affairs Minister Edgars Rinkēvičs and Saeima National Security Committee chairperson Inese Lībiņa-Egnere.

BNN had previously reported that Latgale Regional Court has decided to enforce from SIA LatRosTrans in favour of AS Polocktransneft Družba EUR 66,744,966 in relation to the illegal pumping and selling of the plaintiff’s owned oil.

In addition, the court has decided to enforce from SIA LatRosTrans state fee of EUR 66,883 and legal costs – EUR 49,800.

As previously mentioned by Vitol Baltics board chairman Robert Kirkup, the court’s ruling in this case will be important for the company and the matter of ownership over assets left from the Soviet Union in Latvia.

«I must say I am greatly disappointed that this case was submitted for repeated hearing. It is a very important case for Latvia because it is not just about us. This is also about just how much businesses can rely on assets left from the former Soviet Union. Even without knowing the outcome of the litigation, it will turn out important for our and other companies’ stability in Latvia,» said Kirkup, adding that otherwise someone else will come and declare ownership.

«We are looking at documents that are 25 to 27 years old and even older. But in the end this is about whether or not assets that were located on Latvia’s territory at the time of restoration of independence belong to Latvia. If you question that, then you question everything people own here. I do hope healthy reason will prevail in the end and we will be able to speak of this case in positive tones,» said Kirkup.

It was previously reported that Polocktransneft Družba submitted a plea to court, saying that technological oil that was contained in the pipeline owned by LatRosTrans is to be considered the plaintiff’s property. Initially the plaintiff wanted the court to recognize their property rights and prohibit LatRosTrans to use technological oil (109,996 tonnes) contained in LatRosTrans pipelines spanning Polotsk-Ventspils and Polotsk-Birzi-Mazeika, as well as pumping stations Skrudaliena 1, Skrudaliena 2, Džūkste and Ventspils pipeline.

In the appeal, the plaintiff asked the court to enforce from LatRosTrans the value of 109,996 tonnes of oil of EUR 65,879,771 and losses worth EUR 18,553,716 in relation to pumped out oil volume.

On 9 December 2011, Latgale Regional Court rejected the plea and partially satisfied LatRosTrans plea regarding additional ruling and made it a duty for Polocktransneft Družba to compensate the defendant associated costs of EUR 103,870.

After reviewing the case in an appeal order, Supreme Court’s Civil Cases Chamber declined the plea on 23 October 2013.


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