We successfully represented a company in Lithuania owned by the W. P. Carey fund in a legal dispute with Kesko Senukai Lithuania. The Lithuanian Supreme Court found that the DIY company Kesko Senukai Lithuania had wrongly failed to pay rent for a logistics center in Kaunas district to the company owned by the W. P. Carey fund.
This final court decision confirmed the obligation of the company Kesko Senukai Lithuania to pay our client the debt accumulated for rent, other payments and procedural interest.
An important decision for commercial property leases
The court found that the logistics centre was fit for use during the disputed period, March–May 2020, and ruled that the tenant’s right to request a rent reduction can be exercised only if the site is defective, and not when the state allegedly restricts the tenant’s activity at the site. The government restrictions did not have a negative impact on the tenant’s activities and physical properties of the real estate; therefore, the tenant’s obligations to pay the rent did not expire.
When assessing the restrictions applied by the state to the tenant’s activity in the context of force majeure, courts of all instances found that the tenant’s financial results during the dispute period were even better than during the same period in 2019. In this case, it cannot be concluded that the termination of the agreement concluded by the parties during the COVID-19 pandemic imposed an unreasonable economic burden on the tenant, or that intended purpose of the lease agreement was invalidated.
The adopted court decision is important in that it shapes the practice of assessment of property lease relationships during the period of the pandemic.