The Lithuanian Court of Appeal ruled in favour of our client, the bankrupt credit union Taupkasė (the bankruptcy administrator is Klaipėdos Administratorių Biuras), in a case brought by ten credit union shareholders over recognising a credit union share as a deposit.
Although the court of the first instance ruled in favour of the claimants – the credit union shareholders – the Lithuanian Court of Appeal overturned this decision and issued a new ruling, particularly important in light of disputes between credit union shareholders and bankrupt credit unions.
Mistake due to failing to read the terms of the contract cannot be a basis for declaring transactions invalid
In the dispute, the credit union shareholders argued that the terms of the contracts with the credit union had not been properly disclosed and explained to them. According to the claimants, the difference between a credit union share and deposit was not explained to them, which led to them concluding the contracts in error.
The court of appeal ruled that it was necessary to assess not only the conduct of the credit union but also the conduct and characteristics of the claimants. It noted that the claimants’ ages, levels of education or the duration of signing disputed contracts did not in themselves mean that the claimants had been misled or could have misunderstood the contract. The court decided that claimants had acted passively and carelessly by not reading the contract and failing to look into its terms; as a result, they had taken the risk that there could be negative consequences, and so their mistake could not be a basis for declaring the transactions invalid.
Our team representing the client