Category: Estonia

Cobalt has successfully represented AS Poohtech and Activity OU in a litigation before the Supreme Court.

The Supreme Court decided in favor of Poohtech and Activity, ruling that a shareholder was not entitled to block the approval of the annual report of a company solely to force the compulsory dissolution of the company. The Court held that voting against an annual report without good reason constitutes bad faith and is therefore impermissible.

Estonia’s Supreme Court took the view that although Estonian law lacks mechanisms for the exit of minority shareholders, this does not mean that those absent mechanisms could be replaced by creating an artificial situation demanding the compulsory dissolution of a company.

According to Cobalt, the judgment is an important precedent, “which explains that there are situations where a shareholder is obliged to vote in a certain way in accordance with the principle of good faith, where a court can replace the shareholder’s declaration of intention by a court judgment, and how this obligation of voting can be applied also to the cases where an annual report is being approved.”

Cobalt’s Managing Partner Jaanus Mody and Senior Associates Kristina Schotter and Kalev Saare represented Poohtech and Activity before the court.

Cobalt Estonia has advised real estate management company Pirita Tee Development OU on the sale of Kadrioru Arikeskus, Kadriorg’s business center in Tallinn, to EfTEN Real Estate Fund 4.

The value of the deal was not disclosed. The transaction is contingent upon the approval of the Estonian Competition Authority.

Kadrioru Arikeskus, situated in Tallinn, is a complex of four buildings that was completed in 2016, with all of its 6,600 square meters of commercial space currently rented out. The largest tenants of the business center are the Citadele Group, Hurtigruten, and Vienna Insurance Group.

Established in 2010, Pirita Tee Development OU is a Tallinn-based real estate management company.

EfTEN Real Estate Find 4 is a closed-end real estate fund designed for institutional investors that is investing in cash flow-generating commercial real estate properties in the Baltics.

The Cobalt’s team included Partners Aivar Taro and Liina Linsi, Senior Associate Karli Kutt, and Assistant Lawyer Helen Sool. 

Cobalt did not reply to our inquiries about the deal.

Nove has successfully represented Nasdaq Tallinn AS in a Tallinn Stock Exchange Arbitration against Olympic Entertainment Group AS involving a May 31, 2018 decision of Nasdaq Tallinn’s Listing and the Surveillance Committee.

According to Nove, Olympic Entertainment Group was claiming that its application of May 15th to end the listing of shares was legitimate and justified and obliged the Tallinn Stock Exchange to complete the listing of Olympic shares.

Nove described the dispute as “complex and landmark,” and reported that, ultimately, “the Arbitration Court of Tallinn Stock Exchange dismissed the action and ordered Olympic to pay the procedural costs.”

The Nove team consisted of Partners Urmas Volens and Veikko Puolakainen.

Eversheds Sutherland Ots & Co has advised Estonian software company Scoro in a EUR 4.4 million Series A funding round involving venture capital fund Livonia Partners and existing investors, Inventure and Tera Ventures. Sorainen advised Livonia Partners on the round, which brings the total amount raised from investors to EUR 6.1 million.

Scoro is a business management solution allowing managers to track KPIs by combining the underlying business tools ‒ such as contact and project management, quoting, invoicing, and reporting ‒ into one system. “It takes most professional service companies more than 10 different applications to get their work done,” comments Fred Krieger, founder and CEO of Scoro. “There are separate apps for virtually every aspect of their workflow. The constant shuffling between different software causes a lot of fragmentation. Scoro solves that problem by combining these tools into a seamless end-to-end solution. This allows teams to become proactive, efficiently manage resources and make better and faster data-driven decisions.”

The company will use the funding to expand its New York and London offices and develop software integration and mass training opportunities.

The Eversheds Sutherland Ots & Co team was led by Partner Maivi Ots and included Legal Adviser Marten Amjarv.

The Sorainen team was led by Partner Toomas Prangli, working with Senior Associates Kai Vainola and Piret Lappert.

The Estonian office of Cobalt has advised and successfully represented long-term client AS Ragn-Sells against a monetary claim made against it.

According to Cobalt, “the dispute primarily concerned the expiration of claims for damages in a lease agreement. Specifically, can the lessor wait three years to enforce a claim for damages along with contractual claims, or does the claim under the lease agreement expire sooner? Another question of the dispute concerned the suspension of the expiration of the claim due to negotiations. Specifically, whether the defendant should fear that by responding to the unjustified claim and providing reasons for its rejection, it could be considered as holding negotiations that suspend the expiration of the claim?”

According to Cobalt, “both the court of first instance and the court of appeals agreed with our position that the lessor’s claim for damages arising from the lease agreement is subject to a shortened deadline. Furthermore, only communications between the parties which indicates a desire to find a solution to the claim can be considered negotiations that suspend the expiration of the claim. The courts dismissed the claim due to the expiry of the claim. The entry into force of the judgment of the circuit court will bring important legal clarity in regard to the suspension of the expiration due to negotiations.”

Cobalt’s team was led by Senior Associate Kaidi Reiljan-Sihvart, who was supported by Partners Liina Linsi and Elo Tamm.

The Estonian office of TGS Baltic has advised the Astel Group on its acquisition of a 95% shareholding in Rakvere Metsamajand, the oldest timber log house manufacturer in the Baltics, from Viru Puit.

The Astel Group is a group of companies that produce and install modular houses to the Estonian and Swedish markets. Its range includes garden houses, saunas, garages, and bigger summer houses. In production, different log profiles are used, and in addition to laminated prunes, the main raw material used is pine. Its products are exported to Scandinavia and Europe, as well as to Japan and Australia.

Rakvere Metsamajand (Rakvere Forest Industry Ltd.), which operates under the Nordic Timber Homes trademark, was founded over 45 years ago as the first company in the Baltics to has produce milled log houses. It has been operating as a privately-owned company since 1994, when the current shareholders privatized it from the state. According to TGS Baltic, “now Rakvere Metsamajand produces high-quality and eco-friendly wooden squared log houses and frame-houses for numerous private and commercial uses, as well as windows, doors, terraces, barriers, stairs and wooden shutters.”

TGS Baltic’s advice included carrying out a legal audit, consulting on the transaction structure, and drafting transaction documents. The firm’s team was led by Partner Sander Karson and included Associate Kart Raud.

Cobalt Estonia has successfully represented Lennuabi, a company specializing in obtaining compensation for flight delays or cancellations, in a dispute with the Smartlynx airline in the Harju County Court.

Cobalt reports that the court awarded 160 Lennuabi customers compensation for Smartlynx’s delayed or unexpectedly cancelled flights. According to the firm, “under the regulation by the European Parliament and the Council of Europe, all passengers are entitled to a compensation up to 600 euros when their flight is cancelled or delayed for more than three hours unless it results from force majeure circumstances.”

According to the CEO of Lennuabi, Karl Gustav Annus, the claims amounted to slightly over EUR 80,000 euros, which Smartlynx refused to reimburse as an out-of-court settlement. “The indifferent attitude of Smartlynx towards its passengers who are stranded in various airports for hours without any information is unacceptable,” explained Annus in a press release, “and any passenger automatically has the right to compensation if the flight is delayed for more than three hours unless it is caused by force majeure.” 

Cobalt Senior Associate Lembit Tedder advised Lennuabi on the matter.

Ellex Raidla has advised LHV Group AS on the public offer, listing, and admission to trading of subordinated bonds.

According to Ellex Raidla, “in total 16,000 subordinated bonds with a nominal value of 1,000 euros will be offered. LHV offers publicly up to 16,000 subordinated bonds under the name of ‘LHV Group subordinated bond 28.11.2028’ with a nominal value of 1,000 euros, an interest rate of 6.0% per annum, and a 28.11.2028 maturity date.”

In addition, according to Ellex Raidla, “the company has the right to increase the offering volume until the issue date by EUR 4 million and issue up to 4,000 additional subordinated bonds as a result of which the total number of the bonds offered may be up to 20,000 and the total volume of the offering up to EUR 20 million. The public offering is carried out only in Estonia. The offering is the first part of LHV’s previously approved bond program. Under the program, LHV intends to issue subordinated bonds in a total volume of up to EUR 45 million in the course of several issues.”

The Ellex Raidla team advising LHV consisted of Partner Gerli Kilusk, Senior Associate Helen Ratso, and Associate Kerstin Jurgenson. 

Ellex Raidla has successfully represented the BLRT Group in a dispute against motorcycle racer Anastassia Kovalenko regarding the accuracy of allegations she published in the media and in her master’s thesis.

BLRT is a shipbuilding company headquartered in Tallinn that owns shipyards in Estonia, Lithuania, Finland, and Norway.

Kovalenko’s father, Valeri Kovalenko, is a minority shareholder in BLRT. Her claims included allegations that BLRT’s 2012 Annual Report was inaccurate and invalid and that minority shareholders had been maltreated by majority BLRT shareholders. 

The Court gave Kovalenko one month to publish retractions in Tartu University’s digital archive, the Russian-language media channel Delovyie Lyudi, Russian-language online and paper editions of Delovyie Vedomost, and other publications.

BLRT was represented by Ellex Raidla’s Partner Ants Nomper and Senior Associate Martin Raude. 

Rask has advised Elle Capital on its exit from real estate development and management company Arealis, which owns and manages a number of A-class office buildings in Tallinn.

Arealis AS, which is owned by the Nordic Contractors group controlled by entrepreneur Toomas Luman, started operations in 2005. The company concentrates on investment and development projects mainly in commercial buildings, but also partly in apartment buildings.

The firm’s team was led by Partner Ramon Rask and included attorney Karl Esko.