Sorainen successfully represented former board members of Investment and Business Guarantees (Invega) – a company subordinate to the Lithuanian Ministry of Economy ‒ in an appeal case heard at Vilnius Regional Court concerning a bonus payment to a former manager of Invega.
The Ministry of Economy appealed the decision of the Vilnius City District Court, claiming that the bonus paid was harmful to the company and should be returned to Invega. As the first instance court ruled in favour of our clients, the defendants, the Ministry appealed to the higher instance court.
However, the appeal was dismissed and the Vilnius Regional Court confirmed that the members of the Board of Invega “acted in good faith and reasonably, were loyal to Invega and their decision was lawful”. The court acknowledged that the former Invega manager, having achieved all of his goals, was entitled to a bonus, so the board rightly decided to pay it.
Comments Gediminas Norkūnas, Invega’s former interim board chairman and one of the defendants in the case: “I am happy that the court of appeal has upheld the previous decision and defended the institution of independent board members. The decision confirmed that independent board members have the right to act independently and in accordance with their conscience and beliefs and they are not bound by the instructions of the external founder.”
Also pleased with the decision of the appeal body is Sorainen senior associate, attorney-at-law Jurgita Karvelė, who comments: “The Court dealt objectively and fairly with the case and rejected the Ministry’s argument that the board has unlimited freedom to decide whether or not to make bonus payments despite the fact that the manager‘s right is envisaged in the employment contract. Courts of both instances implemented one of the fundamental principles of contract law – contracts must be respected.”
The clients were represented by partner Žygimantas Pacevičius with senior associate Jurgita Karvelė.
