Court-approved settlement in Lithuania: when it becomes final, if unpaid

The court approves a settlement agreement (taikos sutartis) by a ruling, and the same ruling terminates the case. This ruling can be challenged by a separate appeal (atskirasis skundas) within seven days. If the ruling was adopted at a hearing, the seven days run from its adoption. If it was adopted in written proceedings, they run from service of the certified copy of the ruling. Where there is no appeal, the ruling becomes final when this period ends. These are calendar days, not working days. If a party does not perform the settlement, the court issues, on request, a writ of execution (vykdomasis raštas) for the unperformed part, and a bailiff (antstolis) enforces it from there.

We have written separately about what a settlement agreement is and when it is worth making one: Settlement agreement as an alternative way to resolve disputes (in Lithuanian). This article is about timing and about what happens after approval.

How the court approves a settlement

Article 6.983(3) of the Civil Code of the Republic of Lithuania (CK Art. 6.983(3)) requires a settlement agreement to be in writing. If this requirement is not met, the agreement is invalid.

Article 140(3) of the Code of Civil Procedure of the Republic of Lithuania (CPK Art. 140(3)) sets the procedure. The parties may end the case by a settlement agreement at any stage of the proceedings. The written text of the agreement is added to the case file. Before approving it, the court explains the consequences to the parties. When approving it, the court adopts a ruling terminating the case and states in it the terms of the settlement being approved. CPK Article 293(5) (CPK Art. 293(5)) says the same: the court terminates the case if the parties have concluded a settlement agreement and the court has approved it.

The court may also approve the agreement without a hearing, in written proceedings. This is possible where the case is being heard in written proceedings, where the parties ask for it, and in other cases provided for in the Code (CPK Art. 140(3)). Even then, the court may decide the question at a hearing if it considers this necessary. How the question is decided determines from which day the appeal period runs.

When the ruling becomes final

A ruling terminating a case may be challenged by a separate appeal – this is set by CPK Article 295 (CPK Art. 295). The period is set by CPK Article 335(1) (CPK Art. 335(1)): a separate appeal is filed within seven days of the day the ruling is adopted. Where the ruling was adopted in written proceedings, the appeal may be filed within seven days of the day the certified copy of the ruling is served.

Two details change the date:

• The period starts to run on the day after the event from which it is counted (CPK Art. 73(3)).
• If the last day of the period falls on a non-working day or a public holiday, the period ends on the next working day (CPK Art. 74(5)).

Where the ruling was adopted in written proceedings, the time until the copy is served is added to the seven days.

The Code states directly that first-instance judgments become final when the appeal period ends, if no appeal has been filed (CPK Art. 279(1)). We count an appealable ruling the same way: no appeal within seven days – the ruling is final. If an appeal has been filed, the appellate court’s ruling on it becomes final on the day it is adopted (CPK Art. 339).

Why does the date matter? Because court rulings are enforced after they become final, unless the court orders immediate enforcement (CPK Art. 588(1)).

One case: payment “after the ruling becomes final”

A client received an offer from the debtor: the full amount would be paid shortly after the ruling approving the settlement became final. The client asked two things. How long will it take for the ruling to become final? And can the other party, having signed the agreement, delay filing it with the court?

The first answer is above: seven days from the adoption of the ruling or from service of the copy, counted under CPK Articles 73 and 74. So a payment deadline tied to the ruling becoming final starts in practice no earlier than seven days after the settlement is approved, and later in written proceedings.

The second answer is practical, not a rule of law. Until the court has approved the settlement, the case is not terminated and continues. If the agreement has not been filed with the court before the hearing, you need to attend the hearing and say there that the parties have settled. What can be done in advance: file the settlement agreement with the court jointly and ask straight away for it to be approved in written proceedings. This is a request, not a guarantee – the court may still decide to deal with it at a hearing (CPK Art. 140(3)).

What approval means for the case

In short: a court-approved settlement agreement has the force of a final court judgment for the parties – CK Article 6.985(1) (CK Art. 6.985(1)). What follows from this, and what happens when the settlement is made after the first-instance judgment, is described in the FAQ on the contractual disputes page (in Lithuanian).

Three points that are not covered there:

• Settlement after a court order for payment. If the parties settle after a court order for payment (teismo įsakymas) has been issued and the court approves the settlement, the same ruling annuls the court order (CPK Art. 439(8)). From then on, what is enforced is no longer the court order but the settlement.
• Litigation costs. Set out how they are split in the settlement agreement itself: who pays what, and how much. If the settlement agreement does not provide for how litigation costs are split, the court does not allocate them between the parties (CPK Art. 94(2)). Each party is then left with its own costs.
• Court fee. When the parties conclude a settlement agreement, 75 per cent of the court fee paid to the court of first instance is refunded to them (CPK Art. 87(2)).

If the settlement is not performed

A court-approved settlement agreement is an enforceable document (CK Art. 6.985(2)). No new statement of claim is needed.

The procedure is set by CPK Article 646(3) (CPK Art. 646(3)):

• The interested party applies to the court that heard the case with a request to issue a writ of execution.
• The request is normally dealt with in written proceedings.
• The court examines the evidence the parties submit on performance of the settlement and issues a writ of execution for the unperformed part, or refuses to issue it.
• The court may change the arrangements for performing the settlement terms, but not the substance of the parties’ agreement.
• If the court refuses to issue the writ, it explains to the parties their right to seek reopening of the proceedings concerning the ruling that approved the settlement.
• A separate appeal may be filed against the ruling to issue or to refuse to issue the writ.

A writ of execution issued on the basis of a court ruling is an enforcement document (CPK Art. 587(1)). You submit it to a bailiff, and enforcement proceeds in the same way as under a court judgment. What the bailiff does first is described in the FAQ on the contractual disputes page (in Lithuanian).

A practical note. Since the writ is issued only for the unperformed part, keep every proof of payment made under the settlement. And if the agreement sets a payment schedule, write down what happens if one payment is late. The clearer the terms, the easier it is for the court to establish what has not been performed.

How to start

Send us the draft settlement agreement or the court ruling that has already approved it, together with information on what has been performed. We will tell you when the ruling will become final and whether the terms are written so that they can be enforced, and we will prepare the request for a writ of execution.

Phone +370 5 212 1506, email info@linden.lt

More about this service: dispute resolution.