- Supreme Court of Lithuania
- V. D. and others v. AB DNB bankas
LONG-TERM CONTRACTS - LOAN AGREEMENT - BETWEEN TWO LITHUANIAN INDIVIDUALS AND A LITHUANIAN BANK - REFERENCE TO UNIDROIT PRINCIPLES TO CONFIRM THE SOLUTION ADOPTED UNDER APPLICABLE DOMESTIC LAW (LITHUANIAN LAW)
HARDSHIP - PRESUPPOSES SUPERVENING FUNDAMENTAL ALTERATION OF CONTRACTUAL EQUILIBRIUM - REFERENCE TO ART. 6.204 OF THE LITHUANIAN CIVIL CODE AND TO ARTS. 6.2.2 AND 6.2.3 OF THE UNIDROIT PRINCIPLES
Plaintiffs, two individuals, entered into a loan agreement with Defendant, a bank. When, due to the supervening financial crisis which caused an increase of the interest to be paid, Plaintiffs were unable to repay the loan, they requested the bank to accept to revise the repayment terms. When the bank refused the revision, Plaintiffs withheld their performance and brought an action for the adaption of the contract for supervening hardship .
The Court rejected Plaintiffs’ claim and in support of its decision invoked both Article 6.204 of the Lithuanian Civil Code and Articles 6.2.2. and 6.2.3 of the UNIDROIT Principles, according to which the adaptation of the contract is justified only if there is a fundamental alteration of the original equilibrium of the contract, and that in the case at hand this was not the case. The Court also pointed out that in any case Plaintiffs were not entitled to withhold their performance.