We represented Latvijas Pārtikas ražotājs, a popular Latvian manufacturer of culinary products and confectionery, that successfully developed “Latvijas Labumi” the trade mark, in a dispute that lasted almost three years with Andrejs Fraimanis for invalidation of an immovable property (production facility) purchase contract and revocation of an assignment contract.
Essence of the dispute
In this case with several respondents and third parties, a claim was brought by A. Fraimanis as surety for financial leasing obligations of a production unit of SIA “Stūraiņu iela 6” to the lessor. When SIA “Stūraiņu iela 6” could no longer fulfil its responsibilities, the lessor unilaterally withdrew from the contracts and disposed of the production unit and claim rights to an investor at no cost. Thereafter, the production unit and claim rights were purchased from the investor by Latvijas Pārtikas ražotājs, which modernised and expanded the production facility and which has been organising production of the majority of its products there since 2015. These transactions were challenged by A. Fraimanis in court on the ground that disposal of the production unit had occurred contrary to the law and good faith.
Result favours the client
The court found that the transactions were concluded within the framework of the parties’ business, that they did not violate good faith and that entering into the contract did not violate the law in any way. The court likewise found that our client’s transaction could not and did not infringe the claimant’s interests. In short, the court rejected the claim to cancel the purchase contract.
Refusal by the Supreme Court to initiate cassation proceedings
Having reviewed the claimant’s cassation complaint, the Latvian Supreme Court refused to initiate cassation proceedings. The court indicated that it did not consider that the case result in the judgment was incorrect or that the case would have significant meaning for ensuring uniform court practice or further development of the law. In the final analysis, after extensive litigation the Sorainen dispute resolution team managed to achieve a result in favour of the client. All claims against our client were rejected and the court ordered the claimant to pay all our client’s litigation costs.
The case is significant and interesting because it addressed a person’s subjective right to challenge transactions to which they are not a party, as well as the lessor’s right to sell a leasing object at no cost without auction and without prior warning to the debtor.