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FCIArb Vilius Bernatonis

Partner, Head of Banking & Finance, Lithuania

Vilnius, Lithuania

+370 5 251 4444; 251 4445

vilius.bernatonis@tgsbaltic.com

Lithuanian, English, Russian

The most authoritative and reputed international legal directories, like The European Legal 500, Chambers Global, etc., highly rank Vilius Bernatonis in energy, banking and finance, international dispute resolution, corporate, and commercial law.

RECOGNITION BY INDEPENDENT INTERNATIONAL PUBLICATIONS

Vilius Bernatonis is listed as an excellent expert in energy, banking and finance, international dispute resolution, corporate, and commercial law by all best known and the most authoritative international legal directories, like The European Legal 500, Chambers Europe and Chambers Global, publishing independent ratings of law firms annually. Some quotes from these catalogues about Vilius:

  • Vilius "strength is his negotiation style, his understanding of our needs and his willingness to hear what the problem is and offer a solution at once. He knows what is happening in the industry in Lithuania at a top level." (Chambers Europe)
  • Vilius “has an impressively broad range of expertise, covering arbitration, commercial and banking and finance mandates.” (Chambers Europe)
  • Vilius "is always accessible and available. He made sure we got what we needed and he knows the sector inside out." (Chambers Europe)

MAJOR PROJECTS

Represented the Lithuanian Government, in co-counsel with law firm Shearman & Sterling (Paris office), in large scale arbitration disputes against Russia’s gas giant Gazprom before the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) in the arbitration case. This case was initiated by the Republic of Lithuania against Gazprom (claimed amount: over EUR 1.5 billion) for applying unjustified gas tariffs when supplying gas to Lithuania due to changes in the gas price formula that were made in violation of the terms of the agreement on the privatization of the national gas company Lietuvos Dujos (2012–2016);

Represented the Lithuanian Government, in co-counsel with law firm Shearman & Sterling (Paris office), in large scale arbitration disputes against Russia’s gas giant Gazprom before the Permanent Court of Arbitration under the UNCITRAL Arbitration Rules in the arbitration case. This case was initiated by Gazprom against the Republic of Lithuania in relation to its plans to split the gas sales and transmission ownership of Lietuvos Dujos as part of the Europe Union’s drive to force dominant energy companies to improve access for competitors (2012–2015);

Represented the Lithuanian Government, in co-counsel with law firm Shearman & Sterling (Paris office), in large scale arbitration disputes against Russia’s gas giant Gazprom before the International Court of Arbitration of the International Chamber of Commerce (ICC) in the arbitration case. This case was initiated by Gazprom against the Republic of Lithuania in connection with an investment dispute on tariffs of the Kaunas Combined Heat and Power Plant (2012–2014);

Represents the Lithuanian Government, in co-counsel with law firm Mannheimer Swartling, in large scale disputes against Russia’s gas giant Gazprom before the Supreme Court of Lithuania in the case where the Ministry of Energy of Lithuania, as a minor shareholder of Lietuvos Dujos, requests the court to initiate the investigation (probing) of Lietuvos Dujos operations in order to evaluate the decisions of its management bodies in relation to gas pricing policy (2011–present);

Advising the operator of the Lithuanian electricity transmission system on the implementation of various electricity transmission system infrastructure projects, including the strategic electricity cross-border interconnections LitPol Link (the strategic electricity cross-border link between the Lithuanian electricity transmission system and the Polish electricity transmission system) and NordBalt (the strategic electricity cross-border link between the Lithuanian electricity transmission system and the Swedish electricity transmission system) (2015–present);

Represented the operator of the Lithuanian electricity transmission system before the Vilnius Court of Commercial Arbitration in three arbitrations against the electricity suppliers related to the breach of the Electricity Balance Agreements (2012–2014);

Advised and represented AB Klaipėdos Nafta in relations with Lithuanian and international banks in connection with financing of the LNG terminal construction project. Advised the client on the implementation of the project, including the structure of the project, conclusion of time charter party on lease of the Floating Storage and Regasification Unit and ongoing tenders on acquisition of construction works of LNG terminal infrastructure, on draft Law of the Republic of Lithuania on the Liquefied Natural Gas Terminal and various draft resolutions of the Government of the Republic of Lithuania, as well as on environmental impact assessment issues (2011–2014);

Together with business partners Baker & McKenzie, provided legal advice to the client, Ministry of Finance of the Republic of Lithuania, concerning financial services related to borrowing in the name of the state and debt management. During the project, possible alternatives of borrowing by the state through the placement of governmental securities in German jurisdiction or conclusion of a loan agreement were assessed; prepared comments on the differences and particularities of the borrowing models concerned. Upon the state’s decision to borrow in the German market by issuing bonds of nominal value at the issue price exceeding EUR 185,000,000, represented the client in the negotiations with the bank underwriter selected by the Ministry of Finance of the Republic of Lithuania and provided legal advice on transaction documents; prepared a legal opinion on legal regulation in the Republic of Lithuania concerning the right of the Ministry of Finance of the Republic of Lithuania to enter into agreements on placement of securities and implementation of contractual provisions in the event of a dispute (2014);

Represented AB SEB Bankas and the European Bank for Reconstruction and Development in negotiations with LKAB Klaipėdos Smeltė and the main shareholder of the company, Terminal Investment Limited SA, regarding financing of Klaipėdos Smeltė, drafted all related financial documents and got them approved (2012–2014);

Regularly provided legal services to The Royal Bank of Scotland, a major bank of the United Kingdom, on restructuring syndicated loans extended to Lithuanian entities. Analysed financial documents, prepared loan security agreements (2011–2014);

Regularly advised VĮ Ignalinos Atominė Elektrinė and ministries of the Republic of Lithuania in negotiations with the European Commission, the European Bank for Reconstruction and Development and the donor conference regarding the financing of the shutdown of the Ignalina Nuclear Power Plant and in relations with the contractor GNS-Nukem (2009–2014);

Provided consultations to the European Investment Bank regarding the performance of JESSICA and JEREMIE programmes involving financial engineering measures in Lithuania, prepared legal opinions, represented in relations with Lithuanian public authorities and partners of the project. Drafted a standard operational agreement, which is the first of this type in Europe, according to which the client implements the JESSICA programme, granting funds to banks operating in Lithuania, which must be used for giving loans to residents for the implementation of housing renovation programmes (2009–2015).

OTHER EXPERIENCE

As a subcontractor of Ramboll acting together with CMS McKenna LLC, was appointed to provide advisory services to NJSC “Naftogaz of Ukraine” and the Government of Ukraine on the reform of the natural gas sector under the public procurement procedure organized by the World Bank (Project ID P151927). The firm provides advisory services with respect to the systematic approach to the alignment of Ukraine’s natural gas sector legislation with the EU 3rd Energy Package (2015–present);

Advises Lietuvos Energija, UAB, a state-controlled energy companies group, which is one of the largest in the Baltic States, with regard to implementation of projects on modernisation of the central heating sector in Vilnius and Kaunas, which are recognised the economic projects of national significance to the Republic of Lithuania. During the implementation of the projects Lietuvos Energija, UAB will construct cogeneration heating plants (waste-to-energy and/or bio-fuel power plants) (the CHP) in the two biggest cities in Lithuania (2015–present);

Successfully defended the interests of FR&R Invest IGA S.A., a restructuring unit of Swedbank, before the Supreme Court of Lithuania in the dispute related to the succession of control in Company group “ALITA”, one of the largest producers of alcohol in Eastern Europe (2015);

Represents the Ignalina Nuclear Power Plant in the civil dispute against contractors on awarding compensation for contract works (2012–2013);

Represented DNB Bank before the Competition Council in investigating a possible violation of competition law related to fixing interbank charges and deciding to terminate the investigation in the absence of a violation (2011–2013);

Represented the monastery of the Order of Friars Minor Conventual (Franciscans) in the civil dispute against UAB Pranciškonų Rūmai regarding buildings expropriated by the Association of Science and Technical Societies of Lithuania in Soviet times. After 9 years of litigation the buildings of the monastery, which are in the heart of the Vilnius Old Town, were returned to their lawful owner, i.e. the state. (2007–2013);

Provided legal services to Valeant Pharmaceuticals International, Inc., a major international pharmaceutical concern, on securing the loan received (2012);

Represented a Scandinavian airline company in selling aircraft to a Lithuanian company. Counselled on matters related to Lithuanian legislation (2012);

Represented ING Bank in restructuring the loan extended to a group of companies engaged in the areas of industrial construction and supervision. Reviewed and updated financial documents subject to the effective legal acts of the Republic of Lithuania (2012);

Provided legal services to a major global pharmaceutical company engaged in creation, production and distribution of generic, proprietary and bio-identical medicinal products, in connection with restructuring of inter-group debt (2012);

Counselled the ECB in relation to the project on the introduction of provisions on ABS loan-level data (i.e. leasing ABS; auto-loan ABS and consumer financing ABS) to the Eurosystem Collateral Framework. Assignment involved adjustment of ABS loan-level data fulfilment form prepared in accordance with the European Union law to the Lithuanian laws (2012);

Advised AB Šiaulių bankas and its shareholders on regulatory issues concerning the acquisition of qualifying holding in AB Šiaulių bankas (the biggest national bank), including the acquisition of the consent of the Bank of Lithuania and the implementation of mandatory tender offer. This is the only deal since the beginning of 2007 in Lithuania related to the acquisition of a qualifying holding in a bank (2012);

Counselled Pontos Group, a family-controlled Finnish company, investing into real estate in Finland, the Baltic States and Russia, regarding a loan from Nordea Bank Finland Plc in order to acquire the shopping centre Babilonas (2011–2012);

Represented Snecma Services Brussels, the largest foreign creditor in the bankruptcy proceedings against AB flyLAL-Lithuanian Airlines (2009 – 2012);

Represented the syndicate controlled by Nordea Bank Finland plc on the extension of the loan granted to the group of pharmaceutical manufacturing companies operating in the Baltic region in respect of the group’s undertaking operating in Lithuania (2011);

Drafted documents securing loan issued by Deutsche Bank to German wood processing company (2010–2011);

Assisted in connection with the legal due diligence of AB Klaipėdos Smeltė in order to assess the suitability of existing conditions for implementing the project of a new terminal (2010–2011);

At the request of Hypo, one of the major banking groups in Germany, presented a legal analysis of possible implications related to the transfer of bad portfolio assets to AidA, a bad loan portfolio agency established by the German government (2010);

Analysed financing documents of some significant borrowers at the request of SEB, one of the major Swedish banks, holding the largest loan portfolio in Lithuania (2010);

Represented FR&R Invest IGA S.A, a major subsidiary of Swedbank, AB, the second largest foreign capital bank in Lithuania, on the restructuring of the loan granted to Company Group Alita, AB, a major producer of alcoholic beverages in Lithuania, and conversion of a part of the loan into shares of the company (2011);

Analysed the possibilities of Barclays, one of the major international banks, for implementing the employee incentive scheme in Lithuania, by granting bonuses and shares to employees (including possible tax and social insurance implications) (2010);

Consulted independent supplier of electricity on wholesale trade in electricity and drafted standard electricity supply agreement (2010);

Representing Swedbank drafted a payment security agreement with a company under restructuring, where a financial collateral arrangement was incorporated (2009);

Counselled Swedbank acting as the leading manager in the IPO. We produced and negotiated the underwriting agreement governing the placement of the shares (agreement regulates both the public placement in Lithuanian and Estonia and the private placement in the UK and the USA), as well as reviewed and commented the subscription agreement and all other corporate documents. Furthermore, assisted Swedbank to arrange the offering of securities through other Lithuanian banks (2009);

Represented a subsidiary of a Belgian company engaged in trade in Belarus in recognition of a Belarusian arbitration award in Lithuania (2009);

Represented clients on issues of regulation of electricity activities and meeting requirements of the European Union law (2009);

Advised Swedbank in the Baltic States concerning tax, corporate and regulatory issues pertaining to the restructuring of bad debts. Analysed inter alia the tax treatment of written-off loans, possibilities to use personal data of Swedbank’s client without infringing the bank’s secrecy, restrictions on transfer of assets by the bank, the effect of the written-off loans on the equity of the bank, possibilities to amicably agree upon and control the foreclosure. In addition, adopted the requested corporate structure to the mandatory Lithuanian company law requirements. The firm suggested and implemented the corporate governance structure of Lithuanian Ektornet companies (2009);

Reviewed document profiles of the clients of one of Lithuania’s leading bank AB SEB bankas and provided recommendations on remedying situations causing legal risks also provided solutions on enhancing protection of creditor’s rights. The cooperation increased our insight in bank’s internal processes, risk assessment mechanisms; the review of provided documents enabled us to give a number of universal solutions on increasing creditor’s rights (2009);

Represented the Government of the Republic of Lithuania in a case initiated by a foreign investor before an arbitral tribunal of the International Chamber of Commerce (2009);

Acted as the main legal adviser of the private investor UAB NDX energija in preparation and performance of the transaction of establishing the national electricity company LEO LT, AB (during the transaction a consolidation was made of the main Lithuanian electricity company LIETUVOS ENERGIJA and two distribution system operators Rytų skirstomieji tinklai and Vakarų skirstomieji tinklai; this transaction resulted in establishment of the company LEO LT, AB that will participate in construction of a new nuclear power station and an electricity bridge to Sweden). Provided consultations regarding separation of activities and other regulatory requirements set by the EU and national laws and regulations (2008);

Counselled representatives of UAB Pohjola Finance (a member of Pohjola Bank Group, a major Finnish finance group) on general corporate, employment, and taxation matters (2008);

In cooperation with the law firm Clifford Chance, which is one of the leading law firms in the world, counselled international bank syndicates lead by J.P. Morgan Plc and ABN AMRO Bank on issues of syndicated loans and securities for obligations (2007–2008);

Counselled Baltic Realty Adviser, a real estate development company, on matters related to share acquisition (2007);

Counselled UAB Ūkio Banko Investicinė Grupė in conclusion of the first ever investment agreement with the Republic of Belarus regarding an investment amount above USD 350 million (2007);

Represented DEPFA BANK plc with regard to long-term crediting to the Kaunas City Municipality (2007);

Represented Danske Bank A/S in acquiring shareholding interest in Sampo Bank plc (2006);

Provided consultations to a major international bank Euroclear Bank SA, providing the services of the clearing and settlement system and other related services, regarding implementation in Lithuania of Directive 98/26/EC of the European Parliament and of the Council on settlement finality in payment and securities settlement systems (2006);

Represented the state enterprise State Property Fund before courts and arbitral tribunals;

As a delegate of the Republic of Lithuania, participated in the UNCITRAL working group drafting recommendations concerning legal acts governing legal relations arising out of mortgage/pledge, was elected to be reporter at the second session of the working group (rapporteur) (2002–2003).

PUBLICATIONS

  • Independence pays off! // Valstybė, November 2015
  • Vilius Bernatonis, Linda Strause, Aare Tark, Eugenijus Filonovas. Energy Markets in the Baltics // Article was originally published in Issue 2.3. of the CEE Legal Matters Magazine, 2015
  • V. Bernatonis, J. Piatina. Investment in Renewable Energy in Lithuania and Other Baltic States: Legislative Update // Expert Guide – Overview of the Nordic and Baltic Region, November 2013
  • Business Disputes: Solutions // Verslo Žinios, 9 June 2006

MEMBERSHIPS

  • Fellow of The Chartered Institute of Arbitrators, Head of the Baltic States Chapter of the Chartered Institute of Arbitrators
  • Correspondent of The International Arbitration Institute
  • Member of the Lithuanian Bar Association
  • Member of the International Bar Association

PROFESSIONAL CAREER

  • Since 2017 Partner and Head of the Banking and Finance practice group at law firm TGS Baltic (former TARK GRUNTE SUTKIENE) 
  • 2009–2017 Partner and Head of the Banking and Finance practice group at law firm Sutkiene, Pilkauskas & Partners (now TARK GRUNTE SUTKIENE)
  • 2008–2009 member of the Board of the national electricity company LEO LT, AB
  • Since 2006 Partner at law firm Sutkiene, Pilkauskas & Partners
  • 2003–2008 Head of the Banking and Finance practice group at law firm Sutkiene, Pilkauskas & Partners
  • 1999–2003 lawyer for the state enterprise State Property Fund

EDUCATION

  • 2012–2013 Diploma in International Arbitration from The Chartered Institute of Arbitrators
    • Attended a variety of courses and seminars on contract law and international commercial arbitration matters (2000–2012)
    • 2000 Vilnius University, Faculty of Law (Master of Law)