Skrastins and Dzenis have persuaded the Latvian Supreme Court that the rulings of lower courts in a real investment dispute had been made in error, and the case has been returned for further consideration.
The EUR 2.5 million case involves a dispute between First Baltic Property Riga (FBP) — a property of the Liechtenstein Investment fund, and S&D’s client in the matter — and the property developer Urban Art and Swedbank and DNB banka, involving a real estate project.
According to Partner Verners Skrastins, in 2006 FBP invested about EUR 2 million in a real estate project financed by the two banks, with the understanding that FBP would receive title to 22 apartments once the project was finished, and that all the investment made by FBP would go into the project. On the same day as the agreement was signed, however, Urban Art also signed an agreement with the two banks, according to which its mortgage was registered on the property. When the project was finished after the global economic downturn the developer became insolvent, and the banks as secured creditors refused to give their permission to FBP to register its title to the apartments.
FBP petitioned the Court to have title to the apartments established in its name and to impose a duty on the banks to register the title in the land register. According to Skrastins FBP’s request was initially denied, and then again on appeal, but the Supreme Court has ruled that the lower courts failed to consider several of FBP's most compelling arguments, and it remanded the case with instructions that they do so.
Skrastins notes that the case is not over yet, because the Supreme Court has not decided the case on the merits, but only rejected the lower court's arguments and returned the case to the court of second instance for further consideration.
Skrastins & Denis Partner Andrejs Gulajevs and Associate Daina Tervite led the representation of FBP in the matter.