Category: Estonia

Sending marketing emails is an excellent way to increase sales. Those who don’t make sales don’t do business. However, a question arises as to whether this complies with strict data protection rules. It is known that the Data Protection Inspectorate is increasingly vigilant and imposes hefty fines for violations.

Personal data or not?

First, it is important to understand whether personal data is being processed when sending marketing emails. If the recipient’s email address does not contain a name, for example, info@lextal.ee, then personal data is generally not processed, and sending marketing emails is allowed. If the recipient has an email with a person’s name, such as henri.ratnik@lextal.ee, then sending an email to them is considered the processing of personal data. In that case, it is necessary to consider whether sending marketing emails is allowed.

Marketing emails with consent

The safest approach is to seek prior consent from the recipient of marketing emails. However, ensuring that the method and text of seeking permission align with GDPR requirements is crucial. Consent must be clear and given for a particular purpose. If consent has been obtained for a different purpose, it cannot be used as a basis for sending marketing emails. For example, if an event participant consented to their photo to be taken at the event, that same consent does not mean they can receive marketing emails. The purpose of this marketing email should have been described when collecting the approval.

Marketing emails without consent – legitimate interest basis

Alternatively, it is possible to send marketing emails without consent. Still, certain rules must be followed because personal data can be used for marketing purposes under the legitimate interest basis in certain situations. For simplicity, let’s call these rules the “Five Commandments” of marketing emails.

First Commandment – Marketing emails can only be sent to existing customers whose email addresses are already on file. Cold marketing, as per these five commandments, should not be done.

Second Commandment – The content of marketing emails must offer similar or related services or products that have already been provided or sold to the customer. For example, a law firm can send a marketing email to a client to whom they have previously provided legal services. It is prohibited to market services or products of cooperation partners or other third parties.

Third Commandment – An opt-out option must be provided when collecting an email address. Simply put, if a customer is asked for their email address, they must be allowed to refuse marketing emails.

Fourth Commandment – Every marketing email must have an unsubscribe button, allowing customers to easily and freely opt out of future marketing emails. Most modern newsletter software solutions provide this option.

Fifth Commandment – A document must be prepared that analyzes compliance with the above rules and puts this analysis in writing. This obligation is not something lawyers invented but arises from GDPR itself.

In conclusion

Marketing emails are one of the most common ways to communicate with existing contacts and share news, products, or service information with them. You can send these emails with consent or based on legitimate interest. In either case, it is crucial to follow specific rules to ensure it is possible and lawful.

By Henri Ratnik, Attorney at Law, Lextal

Ellex Raidla has advised Specialist VC on leading the EUR 380,000 pre-seed investment round for Estonian biotechnology start-up Gearbox Biosciences. UniTartu Ventures also participated in the round.

According to Ellex, Gearbox Biosciences – a company founded by University of Tartu researchers – also received research grants which, together with the financing round, amount to over half a million euros.

Gearbox Biosciences is developing a novel technology that makes it possible to produce proteins without the use of antibiotics using industrial biotechnology. “The company promises to help reduce the use of antibiotics outside of medicine and the risk of the spread of antibiotic-resistant bacteria,” Ellex reported. “According to the company, the technology being created can be used, for example, to produce diabetes drug insulin. It has not been possible to do this without living cells until now and, classically, large amounts of antibiotics are used for this. However, the new approach makes it possible to dispense with antibiotics and increase production efficiency.”

The Ellex team included Partner Antti Perli and Counsel Rutt Vark.

The firm did not respond to our inquiry on the matter.

Ellex Raidla has advised energy storage technology company Skeleton Technologies on its EUR 108 million round with equity investors Siemens Financial Services and the Marubeni Corporation, among others.

According to the firm, Skeleton Technologies is the global technology leader in supercapacitor energy storage in automotive, transportation, grid, and industrial applications. “This funding will accelerate the development of next-generation products and finance the manufacturing expansion for supercapacitors and the company’s new high-power battery technology – the SuperBattery,” Ellex reported. The companies have also partnered to automate and digitize Skeleton’s upcoming factory in Leipzig, Germany.

“Securing an investment from one of Europe’s largest tech companies is a significant milestone for Skeleton,” Skeleton Technologies CEO and Co-Founder Taavi Madiberk commented. “In addition to SFS’ investment, Siemens is also a key partner, supplier, and customer. Their expertise in industrialization and commercial partnerships will propel our growth and solidify our role in leading the energy transition.”

The Ellex team included Partners Ermo Kosk and Antti Perli, Counsels Rutt Vark, Toomas Kasesalu, Jaanus Ikla, and Gerd Laub, Senior Associates Hanna Pahk and Merlin Liis-Toomela, and Lawyers Liis Tava and Karl Rudolf Org.

The firm did not respond to our inquiry on the matter.

Cobalt has advised Alexela on the acquisition of the remaining 50% stake in Rohe Solution from Finland’s Haminan Energia.

Rohe Solution is the Finnish subsidiary of Alexela. It offers natural gas and liquefied natural gas and related services. Alexela is an Estonian company that operates mainly in the field of energy.

Haminan Energia is based in Hamina, Finland, and focuses on bioenergy and sustainable energy solutions. The company offers electric, natural gas, district heating, and charging point services, among others.

Back in 2021, Cobalt advised Alexela on its acquisition of a majority stake in the Kotka tank storage (as reported by CEE Legal Matters on January 15, 2021). In 2020, Cobalt also advised Alexela on a EUR 37 million loan from Sihtasutus KredEx (as reported by CEE Legal Matters on November 16, 2020).

The Cobalt team included Partner Peeter Kutman, Managing Associate Jesse Kivisaari, and Associate Getter Villmann-Nogene.

Cobalt did not respond to our inquiry on the matter.

TGS Baltic has advised agriculture technology startup Paul-Tech on its EUR 1.4 million seed round led by Estonian venture capital fund Superangel and including SmartCap, Honey Badger Capital, EstBAN, Tatoli AS, Overkill VC, and Swedish business angels. Ellex Raidla advised Superangel.

According to TGS Baltic, Paul-Tech’s vision is that, with their soil plant, farmers find the optimal balance between agronomic, environmental, and economic aspects for sustainable management. “They offer a solution in which, in addition to monitoring the seedling, producers are also given an overview of the processes taking place in the soil in real time, as a result of which agricultural practices that are more sustainable for the soil and the environment can be used, and limited resources can be optimally distributed.”

The investment will be used to expand into the UK market and develop Paul-Tech’s product offering.

“In light of growing environmental, societal, and economic pressure, sustainable practices are more crucial than ever,” Superangel Partner Marko Oolo commented. “Paul-Tech’s commitment to reducing water wastage, minimizing carbon dioxide emissions, and enhancing crop production aligns seamlessly with our investment philosophy of intersecting sustainability and technological innovation. We are excited to support Paul-Tech in driving positive change within the agricultural sector and creating lasting value.”

The TGS Baltic team was led by Senior Associate Mirko Kikkamagi and included Partner Kadri Kallas, Senior Associate Silvia Urgas, Associate Helena Kuuse, and Lawyer Stina-Maria Lusti as well as former Senior Associate Mari-Liis Orav, who has since left the firm.

The Ellex team included Partner Antti Perli, Counsel Rutt Vark, and Lawyer Liis Tava.

Cobalt has helped Tallinn-based Monemon obtain its e-money license from the Estonian Financial Supervision and Resolution Authority.

Monemon is an e-money institution. According to Cobalt, it is the third company in Estonia to have received an e-money institution license.

Monemon styles itself as an alternative banking solution for Generation Z customers: a platform “where your daily financials are connected to an exciting digital world – MOWO – a parallel universe, where you can spend your virtual Monecoin like there is no tomorrow.”

The Cobalt team included Partner Monika Koolmeister, Senior Associate Kaarel Eller, Associate Peep Vahi, and Junior Associates Anna Daniel and Andres Haavik.

Most people clearly understand the need for insurance when renting or owning real estate. However, a common problem is knowing what to consider when insuring and what to look for or remember regarding insurance policy conditions when it has been signed and damage occurs. I’ll highlight five essential nuances often overlooked by companies and individuals when insuring their rented or personal real estate, drawing from my more than 25 years of experience in insurance law.

Underinsuring buildings: insuring for less than the actual rebuilding cost

When insuring buildings, it’s crucial to determine the insurance sum, which represents the maximum amount payable in the event of a claim. This amount should be based on the cost of rebuilding the building, in other words, the construction cost. Building insurance policies are often signed for several years with the same amount, even though construction costs may have risen in the meantime. In other words, a new contract is signed with the exact same amount as in previous years because it seems correct at first glance. Why is this a problem? If the increase in construction costs is not considered when signing or renewing the insurance policy, the insurance may not cover the entire damage. Insurance companies compensate for damage proportionally to the ratio of the insurance amount to the building’s construction value. The simple formula for this calculation is dividing the insurance sum by the total building’s construction value. If this quotient is less than one, it signifies underinsurance. In such a case, the insurance will only cover damage in proportion to that quotient. P.S. To some extent, underinsurance may be allowed in insurance policies, and the specific limit is stated in the policy.

Here’s an illustrative example of how insurance compensation is calculated in the case of underinsurance.

The insurance sum in the contract is 73,000 euros. The actual construction cost of the building is 100,000 euros. Therefore, the building is insured to 73% of its value. So, in the event of damage, the insurance will only compensate for 73%. For instance, if damage occurs in only a part of the building, the insurance must reimburse only 73% of the cost of restoring that part. I’ve encountered cases where the outcome was that the client received only 50% of the damage from the insurance because the proper calculation of the insurance sum was not considered during the insurance process or because they tried to save money on insurance.

Recommendation: To avoid underinsurance, it’s better to opt for a slightly higher insurance sum, even if it results in overinsurance. Determining the correct insurance amount is the policyholder’s responsibility. The insurance premium won’t significantly increase every month, but it will ensure the necessary protection in the event of an insurance claim. 

Overlooking Fire Safety Requirements or Assuming That Insurance Will Pay Regardless of Compliance

Just as traffic rules apply on the road, fire safety requirements apply to real estate. Not adhering to these requirements can lead to severe consequences in the event of a fire. Insurance companies assume that policyholders comply with these requirements. They don’t check or confirm compliance with these requirements when the policy is signed. They expect these requirements to be followed, just like we all expect others to follow the law. For example, if fire safety requirements require the presence of firewalls, they must be in place. Insurance companies calculate insurance premiums based on the size of the risk, and they have the right to assume that the building complies with the fire safety requirements in effect at the time of construction. The purpose of firewalls is to contain the spread of fire within a specific area for a certain period, allowing firefighters to localize the fire within the firewalls.

Recommendation: If fire safety requirements are not met in the insured building, you should inform the insurance company before signing the insurance policy, preferably in writing. However, this may mean having to pay more for insurance.

Taking out insurance doesn’t mean you can stop being cautious

Taking out an insurance policy doesn’t mean the end of the need for careful behavior. The policyholder must act cautiously during the validity of the insurance policy as they would if they didn’t have the insurance policy. Insurance companies and the law expect the insurance risk to stay the same during the insurance policy’s validity.

Recommendation: Don’t assume that “the insurance will cover it.” You must continue to act as carefully as a reasonable person would without an insurance policy.

Liability insurance, along with building insurance, is highly sensible

Insuring buildings and apartments protects your property. However, damage can also begin in your apartment or building and extend to other apartments. Similar situations can occur with water damage. If water or central heating pipes burst, they can cause flooding in adjacent or lower units. In my practice, I’ve seen cases where the water damage originated from an apartment on the upper floors of a high-rise building, and the resulting damage to lower units exceeded the value of the upper apartment itself. Liability insurance is a great help in mitigating such significant risks.

Recommendation: Always consider taking out liability insurance along with your building insurance policy.

The great nuance of liability insurance – coverage of legal expenses

Liability insurance also covers your legal expenses. The advantage of liability insurance is not just that the insurance company compensates for the damage you caused. Often, damage claims require legal assistance to protect your interests. Liability insurance also covers legal expenses necessary to defend against claims made against you. Thus, with liability insurance, you receive coverage for attorney fees in the described scope.

Recommendation: Always consider taking out liability insurance along with your building insurance policy, as it also covers your potential legal expenses. When you can entrust the handling of insurance cases to an attorney and focus on your primary work instead of administrative tasks, the peace of mind and coverage of legal expenses that come with liability insurance may make it worth considering.

In Conclusion

These five nuances are often overlooked when insuring real estate, but as I explained, they are critical. They should be given attention when insuring real estate, as they can have a significant financial impact when damage occurs.

By Olavi-Juri Luik, Partner, Lextal

Cobalt has advised Interchemie on the court dispute and resulting agreement with competitor Kepro regarding the termination of Interchemie’s lease agreement and eviction from their factory.

Interchemie Werken De Adelaar Estonia is a pharmaceutical company that produces veterinary products, including veterinary medicines, nutritional products, and disinfectants.

According to Cobalt, the dispute started as a company controlled by a former Interchemie board member sold the Viimsi property on which the Interchemie factory is located to its competitor, Kepro. The new owner sought to terminate the lease with Interchemie and demanded that they move out.

“Important results were achieved in court for Interchemie since a new lease agreement with the term of use of the Viimsi factory was obtained until the summer of 2038. The victory was existential for Interchemie’s future operation, and failure to achieve it would have caused a loss of tens of millions of euros,” the firm reported.

The Cobalt team was led by Managing Associate Lembit Tedder and included Partner Karina Paatsi, Managing Associate Annika Peetsalu, Senior Associates Tavo Tiits and Sandra Sillaots, Junior Associate Saara Maria Puur, and Assistant Lawyers Anette Jaani, Kristi Ojala, Jaanus Randma, and Rachel Sermat.

Cobalt has advised FootonVolt on the sale of an 18-megawatt portfolio including 13 solar parks to KC Energy. Sorainen reportedly advised the buyer.

KC Energy is a joint venture of Kaamos Energy and Combiwood Invest. It develops, constructs, and operates renewable energy projects, and produces and sells renewable energy.

The Cobalt team included Partner Peeter Kutman and Senior Associates Kerli Paasoja and Helen Sool.

Ellex has advised the LHV Group on its EUR 35 million public issuance of subordinated bonds.

According to Ellex, the bonds have a 10.5% interest, a nominal value of EUR 1,000, and a maturity date of September 29, 2033. Interest payments are made quarterly. The bonds “were extremely popular with investors and were oversubscribed 16.3 times by the end of the subscription period on September 26.”

The LHV Group is an Estonia-based entity primarily involved in the financial services industry and a public company listed on the Nasdaq Tallinn Stock Exchange.

LHV had initially planned to raise EUR 25 million through the issuance, but increased the volume to EUR 35 million following the substantial interest. In total, 16,255 investors subscribed to LHV bonds for the amount of EUR 407.5 million, the firm reported, while the maximum amount covered by the company’s bond program is EUR 200 million.

Ellex had also advised the LHV Group on a previous public offering of subordinated bonds, back in 2020 (as reported by CEE Legal Matters on October 6, 2020). 

The Ellex Raidla team included Partner Gerli Kivisoo, Counsel Gerd Laub, and Associate Georg Kuusik.