Estonian Air (Tallinn Lennart Meri) has been ordered to pay LTL3.3 million (USD1.2million) to Air Lituanica (Vilnius) after a Stockholm arbitration court ruled in favour of the latter in their case involving the unilateral termination of their Flight Services and Commercial Agreement contract in November last year.
Under the terms of the airlines' Flight Services Agreement (FSA), Estonian Air was to provide flight services to Air Lituanica with one E170, ES-AEB (cn 17000106), until the end of 2015. The aircraft was used for dedicated flights from Vilnius to Amsterdam Schiphol and Berlin Tegel.
In November last year however, the Estonian carrier cancelled the agreement accusing Air Lituanica of repeatedly failing to meet its payment obligations. The Lithuanians, in turn, claimed that on the termination of the contract, Estonian Air was still indebted to them to the tune of LTL5.7million (USD2.244million) for "already transported passengers and deposits paid."
In its ruling, the Arbitration Institute of the Stockholm Chamber of Commerce of Sweden (SCC arbitration) ordered the Estonians to pay Air Lituanica LEL4.489million in withheld ticket revenue while ordering the Lithuanians to pay LEL1.657million to Estonian Air in damages. The resulting outcome left Estonian Air having to pay Air Lituanica LTL3.3 million.
