Category: Estonia

Nove has successfully represented PKM Grupp OU in a road construction dispute before the Estonian Supreme Court.

According to Nove, the contracting authority requested that the PKM Group — the contractor —build a road with different types of pavement than that it offered. According to Nove, the contracting authority later found that the type of pavement ordered did not meet its expectations. 

The Supreme Court reversed the judgment of the circuit court holding PKM Grupp responsible for the situation. 

Nove Parter Kristjan Tamm represented the PKM Grupp before the Supreme Court.

Squire Patton Boggs has successfully defended the Republic of Estonia against a USD 100 million investment treaty claim brought under the Netherlands-Estonia Bilateral Investment Treaty by Estonian water provider AS Tallinna Vesi and its Dutch shareholder United Utilities B.V., over the state’s refusal to allow an annual increase in water tariffs.

In an award issued on June 21, 2019, the ICSID arbitration tribunal dismissed all claims brought against the Republic of Estonia and ordered the claimant to pay more than USD 750,000 to Estonia for fees and costs it incurred in defending the claim.

The Squire Patton Boggs team was led by Paris and Prague Partner Rostislav Pekar, Berlin Partner Eveli Lume, Frankfurt Partner Horst Daniel, New York Partner Luka Misetic, Prague Partner Maria Polakova, as well as Frankfurt Associate Ariane Sproedt, and Prague Associates Matej Pustay and David Seidl.

Ellex Raidla has helped the Estonian Ministry of Finance draft the documents for Estonia’s short-term treasury bill program.

On June 17, 2019, the State Treasury of Estonia sold EUR 200 million worth of treasury bills with a negative yield at auction, which according to the Ministry of Finance means that the buyer of treasury bills is to pay interest to the State Treasury. 

Participators in the auction included LHV, Luminor, SEB, and Swedbank. The bidder offering the most favorable interest rate for the state will win the right to buy the debt instruments.

The Treasury auctioned EUR 100 million worth of treasury bills for six months with an average yield to maturity of -0.063 percent and another EU100 million for 12 months with an average yield of -0,19 percent.

The bonds are registered with the Nasdaq CSD SE Estonian Depository.

According to Ellex Radla, the Ministry of Finance confirmed the framework for the issuance of treasury bills for cash management purposes in April this year, which, if necessary, will allow the Treasury to use bonds with a maturity of up to one year. Compared to standby loans issued by banks, treasury bills provide a more affordable supplementary instrument for cash management.

The Ellex Raidla team was led by Partner Raino Paron.

Sorainen Estonia has advised Intrum on the purchase of Danske Bank’s Estonian portfolio of overdue loans.

Intrum is a credit management company with experience in financial and collection services that has a presence in 24 European countries.

According to Sorainen, the acquisition will enhance Intrum’s market position and allow the company to expand its competence in managing collateralized assets.

The Sorainen team consisted of Senior Associate Monika Tomberg and Associate Kristjan Nommik.

Sorainen could not disclose any further information on the deal.

Sorainen has successfully represented the Polybius Foundation in a dispute with a participant in Polybius’s initial coin offering, who was attempting to force a reversal of his token purchase.

According to Sorainen, this was the first time ever that an Estonian court has analyzed a token holder’s right to unilaterally reverse a token purchase in an initial coin offering (ICO) context.

The court of first instance ruled in favor of the Polybius Foundation, finding that a token holder has no right to reclaim money paid when participating in an ICO. The court also held that consumer protection regulation does not extend to participation in ICOs. The token holder, Maksim Velitsko, can still appeal the decision to the circuit court.

The Sorainen team consisted of Partner Reimo Hammerberg, Counsel Karl Kask and Senior Associate Triin Toom.

Ellex Raidla and Hannes Snellman have advised Fazer Group in its EUR 475 million divestment of Fazer Food Services to Compass Group PLC. The transaction remains subject to EU Commission competition approval.

Fazer Food Services is a food service provider in the Nordics, with approximately 1,000 restaurants in Finland, Sweden, Denmark, Norway, and Estonia. Compass Group PLC is a food service provider operating in 45 countries. 

The Hannes Snellman team consisted of Managing Partner Riikka Rannikko, Partner Richard Akerman, Managing Associates Ammar Khan, Erkko Korhonen, and Klara Kjellberg, Specialist Partners Johanna Haltia-Tapio and Jenny Lundberg, Senior Associates Sini Paajanen, and Associates Jonas Sjoberg, Nicole Jerad, Sara Soini, Moa Fritzon Torbjelt, Josephine Lindgren, and Jenni Heurlin.

Ellex Raidla team was led by Partner Risto Vahimets, supported by Senior Associates Karl-Erich Trisberg and Martin Maesalu and Associate Anna Trine Raudsepp. 

Ellex Raidla said it could not disclose any additional information about the deal.

Editor’s Note: After this article was published Sorainen announced that it had advised the Compass Group on its acquisition of Fazer Food Services. The firm’s team consisted of Partner Piret Jesse, Senior Associate Juulika Aavik, and Associate Lisette Suik.

Ellex Raidla has advised Magnetic MRO AS on an agreement with Shenzhen Yongtai Trading Co., Limited and Sapphire Investment Holding Limited to raise additional capital of up to EUR 8.95 million.

The total share capital of Magnetic MRO (MMRO) will be increased from EUR 1,090,188.80 to EUR 1,283,200 by way of issuing up to 30,158 new shares with the nominal value of EUR 6.4 each for the aggregate issue price of up to EUR 8,950,000.

According to Ellex, MMRO has a total of 11 different business units, with some more focused on profitability and others more driven towards fast growth. According to MMRO CEO Risto Maeots, “a significant part of the equity injection will be allocated into fuelling organic growth in our growing business units.”

According to the agreements, Shenzhen Yongtai Trading Co., Limited, a limited liability company registered under the  laws of P.R. China, is authorized to subscribe for up to 26,957 new shares of MMRO granting it a shareholding of up to 13.44% in MMRO for the total issue price of up to EUR 8,000,000 and Sapphire Investment Holding Limited, a limited liability company registered under the laws of Hong Kong, is authorized to subscribe for up to 3,201 new shares of MMRO granting it a shareholding of up to 1.60% in MMRO for a total issue price of up to EUR 950,000. The investors may subscribe for the new shares within a one-year period in multiple tranches. The subscription of new shares by Shenzhen Yongtai Trading Co., Limited is subject to certain regulatory approvals of P.R. China.

After the subscription of the new shares in full, the registered share capital of MMRO shall be EUR 1,283,200 and the total number of shares of MMRO shall be 200,500. The shareholding of Hangxin Aviation Services Co., Limited, the existing sole shareholder, may decrease as a result of the issue of new shares from 100% to 84.96%.

The Ellex Raidla team consisted of Partner Risto Vahimets and Senior Associates Karl-Erich Trisberg and Helen Ratso.

Ellex Raidla said it was unable to disclose any additional information on the deal.

TGS Baltic has advised KAFO Eesti, a vendor of both coffee and coffee dispensing machines, on joining the Eugesta Group, a Lithuanian wholesale provider.

The agreement was signed in April and the transaction closed in June upon the receipt of merger clearance from the Estonian competition authorities.

The TGS Baltic team included Partners Kadri Kallas and Helmut Pikmets and Associate Kart Raud.

TGS Baltic did not reply to our inquiry on the matter.

Cobalt has advised Karma Ventures as a lead arranger on its USD 3.65 million investment in Infermedica, a provider of artificial intelligence technology solutions for healthcare companies.

Karma Ventures led the round with participation from Dreamit Ventures, Inovo Venture Partners, and Muller Medien.

Karma Ventures is an early-stage venture capital firm, specialized in late seed and A round investments in European tech startups. 

Cobalt has previously advised Karma Ventures on investments in Realeyes (as reported by CEE Legal Matters on May 29, 2018), AppGyver (as reported on October 24, 2017), Plumbr (as reported on April 19, 2017), SpectX (as reported on June 9, 2017), Adaptive Simulations (as reported on May 9, 2017), Minut, Inc. (as reported on November 27, 2017), Sonarworks (as reported on December 15, 2017), CGTrader (as reported on December 18, 2017), and MeetFrank (as reported on July 10, 2018).

The Cobalt team consisted of Partner Kristel Raidla-Talur, Senior Associate Greete-Kristiine Kuru, and Associate Sven Bottcher. 

Nove has successfully represented Europark Estonia before the Estonian Supreme Court in a dispute involving whether the parking manager’s leaving a contractual penalty notice under a client’s windshield wiper constitutes a reasonable way of delivery. The Court found that it was.

The defendant had parked in Europark Estonia’s parking area and had failed to pay 11 parking penalties. The owner of the parking area left a notice under the windshield wiper of the defendant’s car every time, but according to the defendant no fines were received. The County Court found that Europark Estonia’s constituted reasonable notice, but the Tallinn Circuit Court disagreed and reversed the decision. 

The Supreme Court’s Civil Chamber ruled that, in these circumstances, delivering a notice in such a manner can be considered reasonable. The Supreme Court thus annulled the decision of the Circuit Court and sent the case for a new hearing.

The Nove team included Partners Arsi Pavelts and Urmas Volens.