The State Data Agency (Statistics Lithuania) won a legal dispute with the service provider in the Court of Appeal of Lithuania

In the Court of Appeal of Lithuania, the State Data Agency won a legal dispute with one of its suppliers that sought to prove that the Agency had unreasonably terminated the public procurement contract for the Modernization of the Integrated Statistics Information System with the company.

The panel of judges of the Civil Cases Division of the Court of Appeal of Lithuania decided to leave unchanged the 7 August 2023 Decision of the District Court of Vilnius City in favor of the State Data Agency.

"Sometimes we have to face the view that state bodies are "toothless" organizations that do not defend their principles. Current legal victory of the State Data Agency proves that in order to achieve the strategic goals set it is possible and necessary to argue in legal language with suppliers that do not fulfill their obligations, and to continue to persistently search for companies that provide professional services to the state, capable of managing available resources and projects. I hope that this legal achievement will become an example for other state bodies which sometimes put up with and tolerate a lack of professionalism of suppliers, change terms of contracts in their favor, and, finally, record unsatisfactory results, such as delayed project implementation, inadequately provided services and a poor image of state bodies", comments Dr Jūratė Petrauskienė, Director General of the State Data Agency.

The Court of Appeal of Lithuania found that the court of first instance (the District Court of Vilnius City) properly assessed circumstances of the case, expressed its opinion on all the arguments stated by the plaintiff, related to the alleged guilt of the State Data Agency, and made a reasonable and substantiated conclusion that the plaintiff did not deny the responsibility for the violation of deadlines of the works. This decision of the Court of Appeal of Lithuania was taken on 16 November.

The company concluded a contract with the State Data Agency on 9 November 2021. The objective of the contract was modernization of the Integrated Statistics Information System (Phase III). In October 2022, the company initiated several meetings with representatives of the Agency, during which they stated that the terms of the contract should be extended due to the complexity of the project, and the terms of the technical specification of the contract should also be changed.

The Agency, in turn, informed the company that, according to one of the provisions of the contract, the contract with the company from 6 November 2022 was unilaterally terminated, as well as a letter would be sent to the Public Procurement Service regarding the inclusion of the company on the List of Unreliable Suppliers published in the Central Public Procurement Information System.

The company appealed to the District Court of Vilnius City regarding this decision, demanding that the Agency pay EUR 308,869.44 (including VAT) for the actual works and services provided. The District Court of Vilnius City, by the 7 August 2023 Decision, rejected the plaintiff's claim, and ordered the plaintiff to pay the costs of litigation amounting to EUR 16,650 to the defendant – the State Data Agency.

The Court rejected as unfounded the plaintiff's claims regarding shortcomings of the technical specification and their correction. According to the Court's assessment, based on the content of the protocols specified by the plaintiff, there is no reason to conclude that there were such demands of the plaintiff and that it informed about objective obstacles preventing timely execution of the contract. During the meetings of the parties, the plaintiff did not indicate any deficiencies in the technical specification.

The Court also found that the plaintiff voluntarily assumed the risk of non-performance of the contract, did not immediately notify the defendant of obstacles to the performance of the contract, did not stop its performance although it had such a right, but, on the contrary, created a basis for the defendant to expect that the contract will be performed on time and that all risks are manageable.