Attorney Gintarė Girdzijauskienė, 30 September 2026
For a business, assigning a claim (cession) often looks like a quick and convenient way to get rid of the burden of debt collection: the contract is signed, the claim is transferred, and the worries stay with the new creditor. Practice shows, however, that such a contract can become a trap for the assignor itself. The risk lies not only in the price and payment terms but also in what seem to be technical provisions – including the clause on where disputes are resolved.
A case from practice
A client recently came to me who had assigned his claims under a contract to another legal entity. After the contract was signed, he received neither reports on the amounts collected nor the fee provided for in the contract. Naturally, the next step is a claim for performance of the contract.
However, the contract contained a clause stating that, if a dispute could not be resolved through negotiation, a party may refer it to arbitration under the “Arbitration Rules”, to an arbitral tribunal of one arbitrator, with Stockholm, Sweden as the seat of arbitration. For many creditors, especially where the claim is small, a dispute in Stockholm would mean costs far exceeding any possible benefit. In practice, such a clause can become not a way of resolving a dispute but an obstacle to resolving it at all.
One clause – two interpretations
While preparing the claim and analysing case law, an essential circumstance came to light. The same company that had acquired my client’s claims had been before the Lithuanian courts more than once. When it suited the company, it went to the Lithuanian courts itself, although its contracts contained the same arbitration clause. When a claim was brought against it, the same clause was presented as an obstacle to hearing the dispute in Lithuania.
In other words, an identical contract term was interpreted differently depending on which side of the proceedings the company was on.
What the court found
Klaipėda Regional Court assessed this contradictory conduct in its ruling of 16 March 2026 (civil case No. e2A-81-613/2026). The court stated (our translation):
“The LITEKO data show that the defendant in this case, participating in other cases as a creditor / claimant, has filed a large number of applications / claims with Lithuanian courts, both for the issue of a court order and in contentious proceedings. The annexes to the applications / claims show that the defendant has submitted in those cases Claim Assignment Agreements whose point 9.3 provides that, if disputes are not resolved within 30 (thirty) days from the start of negotiations on such a dispute, a party may refer the dispute to arbitration under the Arbitration Rules to an arbitral tribunal composed of 1 (one) arbitrator appointed under those Arbitration Rules; seat of arbitration Stockholm, Sweden; thus these circumstances clearly confirm that in other cases the appellant regarded the analogous standard provision of point 9.3 of the Agreement as non-mandatory and initiated cases in Lithuanian courts, by that action only confirming once again that this arbitration clause is not mandatory. These circumstances allow the conclusion that the court of first instance did not breach the rules of jurisdiction and that in the case at hand there was no basis to apply either Article 137(2)(6) or Article 296(1)(9) of the Code of Civil Procedure.”
Put simply, the arbitration clause was not recognised as an obstacle to hearing the dispute in a Lithuanian court: there was no basis either to refuse to accept the claim or to leave it without examination.
Why this matters
This ruling matters not only as the resolution of a particular dispute. It recalls several more general rules that are useful to anyone dealing with similar contracts.
The wording matters a great deal. The clause states that a party “may” refer the dispute to arbitration. Such permissive wording does not create an unconditional obligation to resolve disputes only through arbitration, so interpreting it as non-mandatory also has a linguistic basis.
A party may not act inconsistently. A party cannot treat the same contract term as non-binding in one case and, in another – when a claim is brought against it – rely on it as an obstacle to hearing the dispute. Such conduct is contrary to the principle of good faith (Article 1.5 of the Civil Code) and to the prohibition of contradictory conduct (venire contra factum proprium).
What to check before signing
A claim assignment agreement is worth reading not as a standard form but as a document that will determine whether and how you get your money back. I recommend paying attention to at least these terms:
- Jurisdiction. Agree that disputes will be resolved in the Lithuanian courts.
- Price and payment deadline. The contract must clearly state the price of the assigned claim or the method of calculating the fee, and a specific payment deadline.
- Reports. If the fee depends on the amounts collected, provide for the assignee’s obligation to report periodically on the progress of collection and the amounts received, as well as a penalty for each day a report is late.
Final thought
Assigning a claim can be a useful tool, but only when the contract protects both parties. Clearly agreed jurisdiction of the Lithuanian courts will help avoid a situation where the clause on where disputes are resolved has to be contested in court before the dispute itself is even examined. A few extra contract clauses today can save a lot of time, money and nerves in the future.
If you are about to sign a claim assignment agreement or have already faced a similar situation, we recommend consulting a lawyer.
