This is an unofficial translation of the Lithuanian court judgment, provided for information only. The Lithuanian original is authoritative. Read the original (Lithuanian)

Civil case No [anonymised]

Court proceedings No [anonymised]

Procedural decision categories: 2.6.10.5.2.1; 3.1.7.6; 3.3.1.19.2

VILNIUS REGIONAL COURT

JUDGMENT

IN THE NAME OF THE REPUBLIC OF LITHUANIA

29 September 2026

Vilnius

The panel of judges of the Civil Cases Division of Vilnius Regional Court, composed of [anonymised], [anonymised] and [anonymised] (presiding judge and rapporteur), in a court hearing in written appeal proceedings examined the civil case on the appeal of the appellant (defendant) [anonymised] against the judgment of Vilnius Region District Court of 10 April 2026 in the civil case on the claim of the claimant, the budgetary institution National Paying Agency under the Ministry of Agriculture, against the defendant [anonymised] for recovery of a debt.

The court

found:

I. The essence of the dispute

1. By its claim the claimant, the budgetary institution (hereinafter BI) National Paying Agency under the Ministry of Agriculture (hereinafter the claimant), asked the court to award from the defendant [anonymised] (hereinafter the defendant, the director) €49,458.76 as compensation for pecuniary damage.

2. By its claim the claimant essentially asked the court to award from the defendant, the former director of the private limited liability company (hereinafter UAB) [anonymised] (hereinafter the Support Recipient, the company), €49,458.76 as compensation for pecuniary damage, corresponding to the support paid to the Support Recipient and not returned for the establishment, maintenance and protection of a forest. According to the claimant, the defendant, as the manager of the Support Recipient, was responsible for the proper performance of the commitments undertaken in the application of 24 March 2011 and in the Forest Planting Project and of the requirements of the legal acts governing the granting of support. He had to ensure proper implementation of the projects, establishment, maintenance and protection of the forest, and that in the sixth year after the establishment of the forest the density of the plantings on both plots complied with the requirements for the granting of support.

[…]

II. The essence of the first-instance court judgment

16. By its judgment of 10 April 2026 (hereinafter the contested judgment) Vilnius Region District Court upheld the claim in full.

17. The court stated that the fiduciary duties of the manager of a legal entity are owed to the legal entity, so their breach alone does not give a creditor the right to bring a direct claim against the manager; however, a creditor may bring a direct claim against the company’s manager on the general grounds of tortious liability if it proves that the manager’s unlawful actions were directed specifically at infringing the rights of a particular creditor and that individual damage was caused to that creditor as a result. In such a case unlawful actions, damage, a causal link and fault must be established. In the present case the claimant clarified that it brings the claim against the defendant, as former manager of the company, specifically on the basis of a direct claim.

[…]

III. Arguments of the appeal and of the response to it

25. By his appeal the defendant [anonymised] asks for the contested judgment to be set aside and a new judgment to be made – to dismiss the claim or to send the case back to the court of first instance for a new examination. The appeal is based on the arguments set out below:

[…]

26. By its response the claimant, the budgetary institution National Paying Agency under the Ministry of Agriculture, asks for the defendant’s appeal to be dismissed as unfounded. The response is based on the arguments set out below:

[…]

The panel of judges of the appeal court

determines:

IV. Circumstances of the case, arguments and conclusions established by the appeal court

27. The limits of the examination of the case on appeal are made up of the factual and legal grounds of the appeal, and the verification of the absolute grounds for invalidity of the judgment (Article 320(1) of the Code of Civil Procedure of the Republic of Lithuania (hereinafter the CCP)). The appeal court checks the lawfulness and merits of the contested court judgment by analysing the arguments set out in the appeal, except for the exceptions laid down in law. The limits of an appeal may be exceeded where the public interest requires it and the rights and legitimate interests of a person, society or the State would otherwise be infringed. Regardless of the limits of the appeal, the appeal court checks ex officio (by virtue of its office) whether there are absolute grounds for invalidity of the judgment specified in Article 329 of the CCP (Article 320(2) of the CCP).

28. The subject of the appeal is the verification of the lawfulness and merits of the judgment of Vilnius Region District Court of 10 April 2026, by which the claimant’s claim for recovery of a debt was upheld in full.

On the essential factual circumstances of the case.

29. According to the case data, [anonymised] was established on 2 February 2011. The defendant was the company’s director and shareholder from its establishment.

[…]

31. On 28 February 2011 the land management division of [anonymised] of the BI National Land Service under the Ministry of Agriculture issued a permit to establish a forest on a plot of non-forest land, granting the company the right to establish a forest over an area of 3.10 ha [anonymised]. In the Forest Planting and Regeneration Project of 7 March 2011 the company is named as the landowner or possessor. Place of forest planting or regeneration [anonymised]. Area to be established 2.575 ha, of which 1.759 ha is to be planted. Project start spring 2011. Method of forest restoration and establishment: planting. Protection measures are specified. The Forest Planting and Regeneration Project was signed by the defendant.

32. On 28 February 2011 the land management division of [anonymised] of the BI National Land Service under the Ministry of Agriculture issued a permit to establish a forest on a plot of non-forest land, granting the company the right to establish a forest over an area of 4.12 ha [anonymised]. In the Forest Planting and Regeneration Project of 7 March 2011 the company is named as the landowner or possessor. Place of forest planting or regeneration [anonymised]. Area to be established 3.700 ha, of which 3.114 ha is to be planted. Project start spring 2011. Method of forest restoration and establishment: planting. Protection measures are specified. The Forest Planting and Regeneration Project was signed by the defendant.

33. The certificates of 25 May 2011 and 2 June 2011 of the [anonymised] district agency of the Vilnius Region Environmental Protection Department on the assessment of the quality of forest planting work state that, after the quality of the forest planting work was checked, the assessment given was „good“.

34. By notice No [anonymised] of 21 June 2011 of the Vilnius support administration division of the Rural Development and Fisheries Programmes Department of the BI National Paying Agency under the Ministry of Agriculture, „On the approval of a support recipient under the measure „First afforestation of non-agricultural land and abandoned agricultural land“ of Priority 2 „Improving the environment and the countryside“ of the Lithuanian Rural Development Programme 2007–2013“, the company was informed that on 15 June 2011 it had been approved as a support recipient.

35. The forest planting and regeneration quality assessment sheets of 8 November 2017 state that the quality of the forest plantings and regeneration is „satisfactory“.

36. On 9 November 2017 the BI State Forest Service issued a certificate on the assessment of the quality of forest plantings and regeneration, which states that the overall assessment of the quality of the forest plantings and regeneration in the seventh year of their growth on the plot [anonymised] is „poor“.

37. By decision of 21 March 2019 of the Vilnius support administration division of the Rural Development and Fisheries Programmes Department of the BI National Paying Agency under the Ministry of Agriculture, a decision was taken to recover the support amount paid out, €49,458.76 (€29,299.96 for forest establishment + €20,158.80 for forest maintenance and protection).

[…]

39. The defendant was informed of the claimant’s decision of 21 March 2019 by the claimant’s letter No [anonymised] of 19 April 2019 „On repayment of the debt that has arisen“; the letter was sent [anonymised].

40. By judgment of 16 January 2020 of Vilnius Regional Administrative Court in administrative case No [anonymised], the applicant company’s complaint against the claimant’s decision to recover the support amount paid to the company was dismissed as unfounded. By ruling of 19 May 2021 of the Supreme Administrative Court of Lithuania in administrative case No [anonymised], the judgment of Vilnius Regional Administrative Court of 16 January 2020 was left unchanged.

41. On 10 November 2021 Vilnius Regional Administrative Court issued a writ of execution to the claimant. On 11 November 2021 the bailiff [anonymised] issued an order accepting the enforcement document for enforcement, accepting for enforcement the document submitted by the recoverer (her representative).

42. On 13 December 2021 the bailiff [anonymised] drew up a notice of attachment of assets, stating that she attaches the assets owned by the company. On 13 December 2021 the bailiff attached the land plot [anonymised] and the land plot [anonymised].

43. On 16 January 2025 the company was deregistered from the Register of Legal Entities, having been liquidated on the initiative of the Registrar under Article 2.70 of the Civil Code.

44. On 30 June 2025 the bailiff [anonymised] adopted an act on the impossibility of recovery, because the company had been liquidated on 16 January 2025. On 1 July 2025 the bailiff adopted an order on completion of the enforcement case and return of the electronic enforcement document, by which enforcement case No [anonymised] was completed and enforcement document No [anonymised] was returned to the recoverer.

45. The claimant having brought a direct claim against the defendant for recovery of a debt, the court of first instance, having established all the conditions of general tortious liability, upheld the claim in full.

On the arguments of the appeal.

46. In the examination of the case in the court of first instance the claimant based its claim against the defendant on his direct tortious civil liability to the claimant, as the company’s creditor, as the company’s former director. The court of first instance found this claim justified, stating that the defendant, as director of the company, insufficiently assessed the risks of implementing the project, did not ensure proper protection of the plantings and did not inform the claimant of the problems that had arisen, and that, owing to the improper implementation of the project, the company became obliged to return the support, which the company did not return.

47. In his appeal the defendant disagrees with such an assessment of his civil liability. He claims that the court of first instance unjustifiably equated the breaches of the support project committed by the company and the defendant’s duties as director of the company with his personal tortious liability to the claimant. According to the appellant, the case did not establish any independent unlawful actions of the defendant directed specifically at infringing the rights of the claimant as a particular creditor, nor was a direct causal link proven between the defendant’s actions and the non-satisfaction of the claimant’s claim against the company. The appellant also states that the claimant did not exhaust all possibilities of recovering the debt from the company itself, although real estate belonging to the company was attached during the enforcement proceedings.

48. The panel of judges essentially recognises these arguments of the appeal as well founded.

49. In deciding whether these arguments of the appeal are well founded, what is of essential importance is not whether the company properly performed the commitments undertaken as the support recipient and whether the defendant properly organised the company’s activities, but whether the case establishes the conditions under which a creditor of a legal entity has the right to demand compensation for damage directly from the manager of the legal entity.

50. Under Article 2.82(3) and Article 2.87 of the Civil Code the duties of the manager of a legal entity are directed first of all to the legal entity. The independence of the civil liability of a legal entity and of its manager means that non-performance or improper performance of an obligation by a legal entity does not in itself create a similar personal obligation for its manager. The cassation court has explained that the law does not lay down a general ground for the liability of the manager of a legal entity to the legal entity’s creditors, so the breach of the manager’s duties to the company alone is not sufficient for the manager’s personal civil liability to a particular creditor to arise. Where a legal entity has breached legal requirements and negative pecuniary consequences have arisen as a result, compensation for them cannot in itself be transferred to the manager of the legal entity (ruling of the Supreme Court of Lithuania of 29 September 2020 in civil case No e3K-3-232-701/2020).

51. For a creditor’s direct claim against the company’s manager to be upheld, it must be established that the manager’s unlawful actions were directed specifically at infringing the rights of a particular creditor and that direct damage was caused to the creditor by those actions. Such unlawfulness may manifest itself in misleading the creditor, providing deceptive information or other dishonest actions directed at a particular creditor. If such an independent tort of the manager is not established, the creditor’s claim against the manager cannot be upheld merely because the legal entity did not perform its obligation to the creditor (ruling of the Supreme Court of Lithuania of 26 May 2021 in civil case No e3K-7-30-969/2021).

52. In the present case the question of the company’s duty, as support recipient, to return the support paid has been resolved by procedural decisions of the administrative courts that have entered into force. By judgment of 16 January 2020 of Vilnius Regional Administrative Court in administrative case No [anonymised], the company’s complaint against the claimant’s decision to recover the support paid was dismissed, and by ruling of 19 May 2021 of the Supreme Administrative Court of Lithuania in administrative case No [anonymised], the judgment of the court of first instance was left unchanged. Thus the company’s duty to return the support paid to it has been established by court procedural decisions that have entered into force and is not to be reassessed in this case.

53. However, the appeal court notes that the company’s duty to return the support and the defendant’s, as former director of the company, personal tortious civil liability to the claimant are different legal questions. The cassation court has explained that, on the basis of a decision of the administering authority to recover funds, the project implementer – a legal entity – may become obliged to return the funds paid, but such a decision does not in itself give rise to an obligation of the members of the legal entity’s management bodies to return funds not recovered from the legal entity. Such an obligation of a member of a management body may arise only once the independent conditions of his civil liability have been established, including that his unlawful actions were directed at infringing the rights of a particular creditor and that it was precisely because of those actions that direct damage was caused to the creditor (ruling of the Supreme Court of Lithuania of 26 May 2021 in civil case No e3K-7-30-969/2021).

54. The court of first instance essentially linked the defendant’s unlawful actions to the fact that, as director of the company and knowing of the commitments undertaken by the company, he insufficiently assessed the risk posed by wild animals, did not ensure sufficient protection of the plantings, did not inform the claimant of problems that arose during implementation of the project, and did not ensure the return of the support after the decision to recover it was adopted. In the panel of judges’ assessment, these circumstances do not confirm the unlawfulness of the defendant’s actions that is necessary for a creditor’s direct claim.

55. The circumstances relating to the protection of the plantings, the assessment of the risk posed by wild animals and other questions of project implementation describe the performance of the commitments undertaken by the company and the defendant’s actions, as the company’s director, in organising the company’s activities. Even if it is recognised that the defendant performed these duties improperly, this does not in itself mean that he committed unlawful acts towards the claimant as a particular creditor. A legal entity acts through its bodies, but for that reason every breach of a legal entity’s obligation cannot be equated with a personal tort of its manager towards a creditor. The opposite interpretation would mean that a company’s manager would become liable for all the company’s unperformed obligations merely by virtue of the position he holds.

56. In this case it has not been established that the defendant misled the claimant about the implementation of the project, gave it incorrect data, concealed material information in order to obtain or retain support, disposed of the company’s assets in order to avoid satisfaction of the claimant’s claim specifically, or carried out other dishonest actions directed specifically at the claimant. Thus the circumstances established by the court of first instance may be relevant in assessing the performance of the company’s commitments and the defendant’s actions in managing the company, but they do not confirm an independent tort of the defendant towards the claimant.

57. The panel of judges also disagrees with the conclusion of the court of first instance on the existence of a causal link. The court of first instance decided that the damage suffered by the claimant was caused by the defendant’s actions, as company director, in implementing the support project – insufficient assessment of the risk that animals might damage tree plantings, failure to protect the plantings and failure to inform the claimant of the situation that had arisen. In the court of first instance’s assessment, as a result of these actions the project was implemented improperly, and so the company became obliged to return the support paid. On the other hand, such a sequence of circumstances confirms the arising of the company’s obligation to the claimant, but does not in itself confirm a causal link between the defendant’s personal actions and the fact that this obligation of the company was later not performed and the claimant’s claim against the company ultimately remained unsatisfied.

58. In this respect it is significant that the duty to return the support lay with the company. On 10 November 2021 Vilnius Regional Administrative Court issued a writ of execution to the claimant, and on 11 November 2021 the enforcement document was accepted for enforcement. The company was deregistered from the Register of Legal Entities on 16 January 2025. Thus more than three years passed from the start of compulsory recovery until the company’s deregistration.

59. During the enforcement proceedings, on 13 December 2021 real estate belonging to the company was attached, but according to the case data it was not sold before the company’s deregistration. The court of first instance rightly stated that the duty to organise the sale of attached property lies with the bailiff, not the recoverer. However, this circumstance does not in itself mean that the claimant’s conduct in the enforcement proceedings has no significance in assessing the reasons why its claim against the company remained unsatisfied. The claimant, being directly interested in the outcome of the enforcement proceedings, had the right to follow the course of the enforcement proceedings, to use the procedural rights granted to it as recoverer, to submit requests to the bailiff and by other lawful means to seek real enforcement of the enforcement document.

60. Moreover, during the procedure of liquidation of a legal entity on the initiative of the Registrar, a creditor is also given means of protecting its legitimate interests in the cases laid down by law. Under the conditions laid down in Article 2.70 of the Civil Code, a creditor holding an unenforced enforcement document has the right to apply to the court for the revocation of the initiated liquidation of the legal entity. There is no evidence in the case that the claimant used this or other means available to it to prevent the company’s deregistration, although its claim against the company had not yet been satisfied at that time.

61. The claimant’s authorised representative explained that the claimant did not apply for the liquidation to be revoked because it ran out of time – the enforcement case had been passed to the bailiff for enforcement and it was waiting for her to make a decision. However, the circumstance that the bailiff’s actions in the enforcement proceedings were being awaited does not in itself explain why the claimant did not use the independent means of protecting rights granted by law to it, as the company’s creditor, to prevent the deregistration of the legal entity. All the more so since the company’s deregistration could have had a direct effect on the possibility of continuing to recover the debt from it.

62. On the other hand, these circumstances do not mean that the claimant is made responsible for ensuring successful compulsory recovery. However, they are significant in assessing both the causal link between the defendant’s actions and the damage suffered by the claimant, and whether there was a sufficient basis to find that the company itself objectively and clearly could not satisfy the claimant’s claim. The circumstances of the enforcement proceedings and of the company’s deregistration discussed do not allow it to be concluded that real possibilities to satisfy the claimant’s claim from the company’s assets were exhausted and that its non-satisfaction was caused precisely by the company’s objective inability to pay. Nor do they form a sufficient basis for concluding that the claimant’s chances of recovering the debt from the company were determined precisely by the defendant’s actions relating to the earlier implementation of the support project.

63. In the appeal court’s assessment, in deciding on the defendant’s civil liability the court of first instance essentially equated the company’s improper performance of its commitments as support recipient, the defendant’s duty, as the company’s director, to organise the company’s activities, and the non-performance of the company’s obligation to the claimant. However, the company’s breach of the support conditions and the resulting duty to return the support are not a sufficient basis for transferring the same pecuniary obligation to the company’s director. This requires establishing his independent tort towards a particular creditor and a causal link between such a tort and the damage caused to the creditor. In this case, in the appeal court’s assessment, the said conditions have not been established.

64. The panel of judges also notes that the mere fact that the company was later deregistered and the claimant can therefore no longer direct recovery against the legal entity does not change the legal assessment of the defendant’s actions. The deregistration of a legal entity does not in itself create liability for its former manager for the legal entity’s unperformed obligations. The opposite conclusion would mean that the conditions of a direct claim against the manager would be determined not by the nature of his own actions but by the legal entity’s later legal and property situation. That would not accord with the separation of the civil liability of a legal entity and its manager or with the conditions for applying a direct creditor’s claim formed by the cassation court.

65. In view of this, the panel of judges finds that the court of first instance incorrectly interpreted and applied the substantive law rules governing the direct tortious civil liability of a legal entity’s manager to a creditor of the company. As the claimant did not prove independent unlawful actions of the defendant directed specifically at infringing its rights and a causal link between such actions and the damage suffered by the claimant, there is no basis for finding the defendant’s civil liability under Article 6.263 of the Civil Code.

On the procedural outcome of the case.

66. In view of the above, the panel of judges decides that the court of first instance essentially established the factual circumstances relevant to the case correctly, but assessed them incorrectly in deciding on the defendant’s direct tortious civil liability to the claimant.

67. The court of first instance unjustifiably recognised the circumstances relating to the improper performance of the commitments undertaken by the company and the defendant’s actions, as the company’s director, in organising the company’s activities as sufficient to establish the defendant’s personal civil liability to a creditor of the company, although the case did not establish independent unlawful actions of the defendant directed specifically at infringing the claimant’s rights, or a causal link between such actions and the damage suffered by the claimant. Therefore there is a basis for setting aside the contested judgment of the court of first instance and making a new judgment – dismissing the claimant’s claim (Article 326(1)(2) of the CCP).

On litigation costs in the court of first instance.

68. Under Article 93(5) of the CCP, where the appeal court sets aside the judgment of the court of first instance and makes a new judgment, the litigation costs incurred by the parties in the court of first instance are redistributed accordingly.

69. According to the case data, the defendant incurred €1,750.00 of litigation costs in the court of first instance, the amount and payment of which are supported by evidence submitted in the case. As the appeal court has dismissed the claimant’s claim in full, the defendant is to be considered the party in whose favour the procedural decision has been made, and therefore €1,750.00 of litigation costs incurred in the court of first instance are to be awarded to him from the claimant.

70. The court of first instance, having upheld the claim in full, awarded to the State from the defendant €967.00 of stamp duty, from payment of which the claimant is exempt under Article 83(1)(10) of the CCP. As the appeal court has dismissed the claim in full, there is no basis for awarding this stamp duty from the defendant.

71. The costs of sending procedural documents in the court of first instance amounted to €4.62. Given that this amount does not exceed the minimum amount of litigation costs to be awarded to the State, €8, laid down by Order No 1R-261/1K-355 of 7 November 2011 of the Minister of Justice and the Minister of Finance of the Republic of Lithuania, the costs of sending procedural documents are not awarded to the State.

On litigation costs in the appeal court.

72. Article 93(1) of the CCP provides that the court awards to the party in whose favour the judgment has been made the litigation costs it incurred from the other party, even if the latter is exempt from paying litigation costs into the State budget.

73. In the appeal court the defendant incurred €1,767.00 of litigation costs, consisting of €800.00 for preparing the appeal (invoice for legal services [anonymised]; payment of 5 May 2026) and €967.00 of stamp duty paid for the appeal.

74. Given that the defendant’s appeal is upheld in full, €1,767.00 of litigation costs incurred in the appeal court are to be awarded to the defendant from the claimant (Article 93(1) of the CCP).

Acting under Articles 290–291 and Article 326(1)(2) of the Code of Civil Procedure of the Republic of Lithuania, the panel of judges of the appeal court

rules:

to set aside the judgment of Vilnius Region District Court of 10 April 2026 and make a new judgment – to dismiss the claim of the claimant, the budgetary institution National Paying Agency under the Ministry of Agriculture, against the defendant [anonymised] for recovery of a debt.

To award to the defendant [anonymised] (personal code [anonymised]) from the budgetary institution National Paying Agency under the Ministry of Agriculture (legal entity code [anonymised]) €1,750.00 (one thousand seven hundred and fifty euros) of litigation costs incurred in the court of first instance.

To award to the defendant [anonymised] (personal code [anonymised]) from the budgetary institution National Paying Agency under the Ministry of Agriculture (legal entity code [anonymised]) €1,767.00 (one thousand seven hundred and sixty-seven euros) of litigation costs incurred in the appeal court.

This judgment of Vilnius Regional Court enters into force on the date of its delivery.

Judges [anonymised], [anonymised], [anonymised]