Klaipeda port authority will need to pay Latvian construction company BMGS JSC nearly half a million euros for additional work during the reconstruction of a berth, as ruled by the Lithuanian Court of Arbitration.
On the 4th of July the court lifted the ruling of the 8th of March of Klaipeda Regional Court and imposed the disbursement of 499 400 euros to the Latvian company, which the port authority had paid for storage, but interest at a rate of 5% per year was not imposed, because the management of the Klaipeda port did not shy away from paying the funds – it immediately began to find out to which of the two consortium companies needs to be paid.
“From the moment of signing the contract on the 16th of November, 2019, it was the appellant [BMGS] who became the responsible partner, acting on behalf of both partners in relations with the defendant [port authority], including the issue of receiving remuneration from the institution for the contract works actually performed,” the Lithuanian court concluded.
In March, Klaipeda Regional Court ruled that the money should be paid to Hidrostatyba, which was the project’s responsible partner until November 2019, but has since went bankrupt. In accordance with the court’s ruling, BMGS became the responsible partner after the funds had already been disbursed, so they must be transferred to Hydrostatyba.
At the time, BMGS reported that the regional court had failed to take into account that BMGS answers to the port authority about the quality of work and will need to fix possible defects from their own funds. And the date of the request for funds is calculated not 60 days after the receipt of the invoice, but 90 days after the signing of the work quality assessment act.
“The court of first instance incorrectly determined the time of performance of the obligations, namely the moment when the defendant was obliged to pay the 499 400 euros withheld under the contract, so the dispute between the parties was settled incorrectly,” the court of appeal instance concluded.
In 2017, Hidrostatyba and BMGS concluded an agreement with the Klaipėda Port Authority for the reconstruction of the berths used by the shipyard Vakaru Boat Factory. During these works, large stones were discovered in early 2018, the lifting and removal of which is considered additional unplanned works.