Concept and Conditions for Applying Restitution
Restitution is the full or partial restoration of the proprietary situation of the parties to a void transaction to the condition that existed prior to its conclusion. In the Republic of Lithuania, restitution applies in the following cases:
- when a person is obliged to return property received unlawfully,
- or received by mistake,
- or when the transaction under which the property was received is deemed void ab initio (from the beginning),
- or when the obligation cannot be fulfilled due to force majeure.
In exceptional cases, a court in Lithuania may modify the manner of restitution or refuse to apply it altogether if its application would unreasonably and unfairly worsen the situation of one party and accordingly improve the position of the other.
Restitution in Kind
Restitution is carried out in kind, except when it is impossible or would cause significant inconvenience to the parties. In such cases, restitution is performed by paying a monetary equivalent.
When the property has been destroyed due to force majeure, restitution is not applied. However, the debtor must transfer to the creditor the right to claim compensation for the destroyed property or hand over any compensation already received.
If the debtor acted in bad faith or restitution is being applied due to the debtor’s fault, the debtor must return the value of the property — unless they can prove that the property would have been destroyed even if it had been under the creditor’s control.
Obligation to Compensate for Partial Destruction or Depreciation
If the property has been partially destroyed or has otherwise depreciated in value, the debtor must pay the creditor the monetary equivalent of the destroyed part or compensate for the decrease in value — unless the decrease resulted from normal wear and tear.
Any fruits and income derived from the property belong to the person who is required to return the property. All expenses related to obtaining such fruits and income shall be borne by that person.
However, if the person is acting in bad faith or restitution is applied due to their fault, they must return the fruits and income obtained from the property and compensate the creditor for any other benefit received. At the same time, the creditor must reimburse any necessary expenses incurred by the debtor to generate such fruits or income.
Summary
In the Republic of Lithuania, good faith third parties who have acquired ownership of property subject to restitution through a transaction involving payment may invoke this transaction as a defense against the person seeking restitution.
Good faith third parties who acquired the property through a gratuitous (non-paid) transaction may not invoke this transaction as a defense if the claimant has not missed the statutory limitation period for filing a claim.
Other actions taken in favor of a good faith third party may also be used as a defense against the person claiming restitution.