Estonian Air had the right to terminate its contracts with Lituania

Last Friday afternoon, the Arbitration Institute of the Stockholm Chamber of Commerce issued their decision in our dispute with Air Lituanica. The arbitration panel confirmed that Estonian Air had the right to terminate its contracts with Lituania, awarded damages to Estonian Air of roughly half a million euros, and rejected Air Lituanica’s claim for damages.

After six months of cooperation last year, Estonian Air terminated its contracts with Air Lituanica because of poor payment behavior. After termination, the revenue in the amount over million euros came due for Estonian Air to pay to Air Lituanica. Estonian Air decided to hold that money until the end of the arbitration as:
-it did not trust Air Lituanica to pay for the damages it caused by the early termination, and
-it was not sure if Air Lituanica had sufficient financing to survive until the end of the arbitration.

" The arbitration confirmed that Estonian Air was entitled to terminate the contracts because of Air Lituanica’s poor payment behaviour and awarded close to half a million euros in damages to Estonian Air," said Jan Palmér, the CEO of Estonian Air.“As a final settlement, Estonian Air will return the revenue frozen since termination after deducting the damages Lituanica owes to Estonian Air.”