Category: Estonia

Cobalt has represented the European Commission in three administrative matters concerning state aid before the Tallinn District Court.

According to Cobalt, “the European Commission submitted written opinions in these matters to ensure uniform application of the State aid rules of the European Union. The Commission supported the position whereby the Tallinn District Court should request a preliminary ruling from the Court of Justice, and in one of the aforesaid matters Tallinn District Court satisfied the respective request. This position of the court affects also the process of other aforementioned administrative matters.”

The European Commission was represented by Cobalt Senior Associate Liina-Naaber Kivisoo.

Ellex Raidla has advised Endover Kinnisvara on its issuance of EUR 6.5 million notes.

According to Ellex Raidla, the bond issuer “was the project company Vega Residents OU.” The firm reports that “the project was financed entirely through the capital markets and … more than 50 investors from the Baltics took part in it.”

In addition, Ellex Raidla claims, “this was a remarkable project in Estonia as generally in similar projects the capital is involved via banks. 

“The success of the issuing is a great recognition for Endover’s work that is done, also it puts a certain obligation and responsibilities on them as the Vega project is definitely a landmark according to which both investors and the market will start to evaluate similar projects,” said Ellex Raidla Partner Raino Paron, who led his firm’s team on the deal, supported by Senior Associates Gerly Lohmus and Helen Metsar.

Attorneys-at-law Aivar Pilv and Brita Oltjer of the Leadell Pilv Law Office have successfully represented private individual Allan Kiil in a dispute against Tallinna Sadam (Port of Tallinn).

According to a summary provided by Leadell Pilv, “the Tallinn District Court refused to satisfy the appeal of the Tallinna Sadam and change the decision of the County Court which satisfied the claim of A. Kiil against Tallinna Sadam for receiving compensation in amount of almost 25,000 Euro arising from the prohibition of competition. Additionally Tallinna Sadam was ordered to cover the procedural costs of A. Kiil in the amount of 6,500 Euro. The District Court ordered the payment of additional procedural costs to A. Kiil in amount of 2,000 Euro.”

In addition, according to Leadell Pilv, “the District Court agreed with the previous conclusions of the County Court establishing that the service contract of the member of management board was cancelled by A. Kiil, not the Tallinna Sadam. According to the court, based on the wording of the decision this was also the understanding of the council of the company. The court was of opinion that any interpretation of the council decision would fail to summarize that the agreement for prohibition of competition was terminated together with the employment relation. The termination of restriction for competition is subject to be clearly stated and formulated by the company, which was not the given case.”

Cobalt Estonia has advised venture capital firm Karma Ventures on its investment in SpectX, a startup founded by former security engineers at Skype and Swedbank that is developing an analytics software solution for rapid processing of unlimited amounts of data.

According to Cobalt, SpectX’s technology innovation “enables handling of machine-generated data in its original location rather than loading it into separate tools and databases for processing.”

According to Margus Uudam, founding partner of Karma Ventures, the investors were impressed by the elegant technology behind SpectX. “There is no other product in the market as fast and flexible as SpectX for analysing large unstructured data sets,” he said. “The professionalism of the team and the initial product they have built show significant potential.”

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

The Cobalt team advising Karma Ventures included Partners Kristel Raidla-Talur and Pirkko-Liis Harkmaa, Associates Greete-Kristiine Kuru, Sille Rastas, and Aleksander Tsuiman, and Assistant Lawyer Christine Mägi.

Antti Perli has joined Ellex Raidla as a Counsel to lead the firm’s Venture Capital and Emerging Companies practice.

Perli focuses primarily on advising venture capital investments and emerging companies. For the past five years, he worked as the in-house counsel and member of the management board at SmartCap, a management company for state venture capital funds.

According to Ellex Raidla, “among others, Antti has advised SmartCap with investments into portfolio companies Realeyes, Jobbatical, Monese, Lingvist, Scoro, Defendec, Vitalfields and with divestments from companies such as GrabCad, Fits.me, VitalFields, Modesat,” and “he contributed to the establishment of the business accelerator Startup Wise Guys and advised its portfolio undertakings.”

In addition, Ellex Raidla reports, Perli “has been involved with the establishment of venture capital funds, preparing fund terms and limited partnership agreements and financial supervision matters, he has also participated in the drafting of the new Investment Funds Act, amendments to the Commercial Code regarding the activities of start-up companies, amendments to the taxation of share options and other regulations and model documents in the field.”

Cobalt Estonia has advised a newly launched venture capital fund, Change Ventures, on Estonian law issues with respect to fund formation and on their first three investments, into Interactio (a Lithuanian startup that provides a simultaneous translation app that fully replaces interpretation hardware for live events), Timbeter (an Estonian startup that offers a smart-device solution for accurate timber measurement and data management), and Guaana (an Estonian startup that provides an online platform for allocating scientific research grants based on peer evaluation).

According to Cobalt, “Change Ventures invest up to EUR 500,000 in seed stage technology startups with primary focus to back ambitious Baltic founders. The fund aims to be the first institutional investor, usually investing alongside angel investors.”

The Cobalt team was led by Partners Kristel Raidla-Talur and Egon Talur, Managing Associate Eva Suduiko, Specialist Counsel Ave Piik, and Associates Greete-Kristiine Kuru and Aleksander Tsuiman.

Glikman Alvin’s Paul Keres has successfully defended Kaur Kender, who the firm identifies as “Estonia’s most controversial writer,” against the criminal charge of creation and dissemination of child pornography in his work.

According to Glikman Alvin, “to the best of our knowledge, it is the first case of its kind in Estonian history where a writer has been indicted solely on the grounds of his literary work. On the eve of the country’s 100th anniversary, we are happy to note the court’s steadfast stance in defense of the freedom of speech and arts.”   

Nove has represented the Estonian company OU Hotell Parnu in the Supreme Court of Estonia in a dispute relating to the validity of transactions concluded by a member of its board.

According to Nove, the Estonian Supreme Court held that § 181 (3) of the Commercial Code of Estonia (which provides that a transaction concluded outside the everyday economic activities of a company between that company and a member of the board is void unless authorized by the shareholders also applies where a party to the transaction is a company controlled entirely by a member of the board and the spouse of that board member. According to Nove, “the Court pointed out that the requirement of shareholders’ consent to a transaction involving a board member was set out to avoid a conflict of interest, as the board member might be tempted to prefer in a transaction his own economic interests rather than act in the best interests of the company,” and held that “a similar risk of conflict of interest occurs when the other side of a transaction is a company controlled entirely by a board member and the spouse of that board member.”  

“By adopting that position,” Nove reports, “the Supreme Court limited the possibilities of board members to divert assets without the consent of shareholders in a situation in which a board member is acting in a conflict of interest.”

According to Nove, “the above means, inter alia, that minority shareholders are able to defend themselves more effectively against harmful transactions that a majority shareholder exerting control over the management board would conclude with himself or a company controlled by himself. It should be underlined that in deciding over the shareholder’s consent to the conclusion of a transaction with an involved person, the shareholder whose interest is affected by the transaction is not allowed to vote.”

Nove Partner Urmas Volens and Leadell Attorney at Law Tambet Laasik acted for OU Hotell Parnu in the matter both in the court of appeal and the Supreme Court.

Cobalt has advised Sten Tamkivi and Silver Keskkula, the founders of the start-up Teleport, on the sale of the company to British technology company MOVE Guides, which moves and manages the mobile workforce. Terms of the deal were not disclosed.

Founded in 2014 by early Skype employees Sten Tamkivi and Silver Keskkula and headquartered in Tallinn, Estonia, Teleport produces applications enabling the free movement of talent. The company’s core product – Teleport Cities – uses data science and matching algorithms to help knowledge workers discover their best places to live and work. Teleport Cities provides income and cost and quality of life data from 260 cities around the world, and served over a million searches by its 250,000 users in 2016. Beyond search, Teleport provides features for on-demand moving advice and automated task lists.

As part of the deal, users of Teleport will continue to use the service under its existing branding. Tamkivi and Keskkula will be joining MOVE Guides’ leadership team with the Tallinn office becoming MOVE Guides’ latest location alongside London, San Francisco, and Hong Kong.

MOVE Guides CEO and Founder Brynne Kennedy said, “MOVE Guides and Teleport have a shared vision to democratize global mobility through software and data science.” She continued, “We are excited to welcome Teleport’s experienced team to MOVE Guides and to integrate their products with our offerings for mobile employees and company data analytics.”

Teleport CEO and Co-Founder Sten Tamkivi added that: “We founded Teleport with the vision of helping free people move, by giving mobile millennials access to modern software tools to smoothly get to wherever they need to be to make most of their potential. I am convinced that now part of MOVE Guides, working together for major customers moving employees of all types every year, we will get to that empowering future much faster.”

The Cobalt team was led by Partners Egon Talur, Karina Paatsi, and Kristel Raidla-Talur and Associates Greete-Kristiine Kuru, Karli Kutt, and Liina Saaremets.

Cobalt has advised the Estonian Development Fund and its investment company SmartCap on the transfer of their venture capital direct investment portfolio to private fund manager Tera Ventures. The portfolio consists of 12 companies, among them international success stories like Jobbatical, Cleveron, Lingvist, Monese and Realeyes.

In April the Estonian Financial Supervision Authority registered Tera Ventures fund as Estonia’s first limited partnership under the country’s new Investment Funds Act. The transfer of the Estonian Development Fund’s and SmartCap’s venture capital direct investment portfolio to the private fund manager is part of their reorganization.

According to Cobalt, “our work included negotiating the limited partnership agreement with the private fund manager, carrying out limited due diligence [with regard to the] transaction documents of the portfolio entities, advising in connection with the transfer of the portfolio to the new fund in co-operation with local counsel in various jurisdictions, and assisting with closing the transaction.

The firm’s team was led by Partner Kristel Raidla-Talur and included Specialist Counsel Edgars Lodzins and Associates Greete-Kristiine Kuru and Sille Rastas.