EU Court opens door for arrest of airBaltic and RIX assets

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The European Union Court has ruled that according to a Lithuanian court’s decision, the assets of Latvian national airline airBaltic and the Riga International Airport (RIX) can be seized to the amount of 200m litas (about €58m), reported Tuesday.

The EU court took its decision on October 23, leaving the door open for creditors of insolvent Lithuanian airline flyLAL-Lithuania Airlines to demand compensation of losses due to allegedly unfair dealings on the part of airBaltic, announced FlyLAL bankruptcy administrator Aurimas Valitis.

Now the decision must be made by Latvia’s Supreme Court on whether action should be taken to arrest the assets of the Latvian airline and its home-base airport.

Riga International airport officials recalled that the Supreme Court had requested juridical clarification from the EU Court regarding its interpretation of EU regulations on recognizing court decisions of other member-states. FlyLAL cited these regulations as the basis for its 2012 demand that Latvia’s courts fulfil the Lithuanian court’s 2008 ruling to ensure the request.

Now that the EU Court has delivered its interpretation of the regulatory acts in question, it remains for the Supreme Court to at last begin hearing the case. RIX officials pointed out the ruling doesn’t state that Latvia must ensure the fulfilment of the demands, which remains entirely the Supreme Court’s prerogative.

FlyLAL went belly-up in 2009, citing unfair competition as one of the reasons behind its failure to stay airborne. In 2008 the Lithuanian Appeals court ruled to freeze 200m litas worth in assets of both airBaltic and RIX, according to FlyLAL demands.

The Latvian Supreme Court then turned to the EU to ask whether there was grounds for refusing to acknowledge the Lithuanian Appeals court verdict.

Latvian officials on their part insist that FlyLAL’s intent with the five-year dispute has simply been to ground airBaltic and take up the resulting slack from Vilnius, rejecting the neighboring country carrier’s claim that it went under just because of discounts granted by RIX to serve as airBaltic’s hub.

Both airBaltic and RIX representatives have expressed incomprehension at the long-standing dispute, saying such an asset-freeze wouldn’t help the Lithuanian side at all, yet would surely threaten to paralyze operations at the Riga airport and bring down airBaltic with it.

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