Category: Estonia

Rask has announced that, since summer 2015, the firm has provided pro bono advice to the Estonian Ski Association.

According to Rask, the firm “helps the Ski Association mainly in everyday corporate matters with International Ski Federation (FIS), tv broadcasting rights, drafting contracts, and other legal elements.”

The Estonian Ski Association brings together a variety of ski-related activities – such as cross-country skiing, ski jumping, combat, alpine skiing, snowboarding, and freestyle. It coordinates all skiing activities in the Republic of Estonia and is the country’s representative for ski sport locally and in international organizations. Estonian Ski Association’s Secretary-General Tonu Seil says that there are various legal matters that need professional supervision, as [the Association] works often with both domestic and international partners. 

Raidla Ellex has advised Eesti Energia AS in connection with the issuance of EUR 500 million notes due 2023.

According to the firm, concurrently with the issuing of the new notes Eesti Energia AS bought back EUR 248 million worth of bonds with a maturity date in 2018 and EUR 193.7 million worth of bonds with a maturity date in 2023. This is the largest bond transaction in the group’s history.

The notes will be listed on the Regulated Market of the London Stock Exchange. Barclays, Deutsche Bank and Nordea Bank were the Joint Lead Managers and Joint Bookrunners, and Swedbank the co-manager. Raidla Ellex reports that “over 80 investors participated in the emission.”

The Raidla Ellex team was led by Partner Raino Paron and Counsel Triin Frosch.

Tark Grunte Sutkiene has advised Baltic Ground Services EE OU, a subsidiary of Lithuanian capital-based company Baltic Ground Services UAB, in obtaining an excise warehouse activity license for the sale of JET-A1 fuel in Tallinn Airport. 

BGS belongs to Eastern Europe´s largest holding corporation in the aviation sector, with shares listed on the Warsaw Stock Exchange. The company provides services to both local and international airlines in the airports of Vilnius, Kaunas, Palanga, Riga, Warsaw, Krakow, Katowice, Zhuovsky, Boryspil, Kiev, Odessa, and Lviv airports.

The firm’s team consisted of Partner Helmut Pikmets, Senior Associate Sergei Jegorov, and Associate Nikita Divissenko.

Nove has represented UAB DK PZU Lietuva’s Estonian branch in a dispute between a policyholder, an insurance broker, and a professional liability insurer regarding the question of who shall bear the responsibility for underinsurance (and is obliged to compensate the amount of indemnity left unpaid by the insurer) in property insurance.

According to Nove, the Estonian Supreme Court held that a policyholder — as the most informed person of the insurable object — is responsible for expressing the value of the insurable interest of the object. The insurance broker may rely on the experience and expertise of the policyholder, but as a rule, the broker must explain to the customer the significance of the value of insurable interest, the amortization, and their impact to the indemnity as well the check of relevance of the insurable value of the specific object to be insured.

Brokers cannot base their advice merely on indicative or average insurable values used by the insurers.

According to Nove, “the judgment therefore clarifies how the ‘know your customer’ principle should be followed in practice in an insurance mediation and specifies the duties of insurance companies and brokers also in the light of the new Insurance Activities Act, which entered into force on 1.1.2016.”

The Nove team was led by Attorney-at-Law Andrus Kattel.

Leadell Pilv has successfully represented K. Kesalo, a former board member of an Estonian company, in a tax dispute in Tartu Administrative Court.

According to Leadell Pilv, the Tax and Customs Board (TCB) of Estonia “made a decision about the liability of [Kesalo] in amount of approximately EUR 26,000, stating that the VAT and income tax debt was caused during the time when [he] was a board member and due to his intentional activities to reflect incorrect data in the tax calculations regarding the fictional transactions of purchase and sale of sugar. As a result, the payable tax obligations were incorrectly declared. Since the TCB was unable to claim from the company the debt determined by the tax decision, the decision … was made about the liability of the board member at the disputable period. [Kesalo] disagreed with the decision and submitted an appeal to the administrative court.”

On October 5, 2016, the Tartu Administrative Court granted Kesalo’s appeal, annulled the lower court’s decision, and ordered the TCB to cover the procedural costs of the client in amount of almost EUR 4,000. The court found that the TCB had not proven that Kesalo had intended to violate the tax law. According to Leadell Pilv, “in the worst case the activity of the client could be considered as gross negligence upon fulfilling the obligations of a board member. But since the 3-year term applicable for gross negligence had already passed by the time of making the decision, the decision was illegal and subject to be annulled.”

The tax authority did not appeal the decision of the administrative court and it has entered into force.

The Leadell Pilv team representing Kesalo was led by Partner Jaak Siim.

Nove has successfully represented one of the largest tour operators of Estonia, OU Novatours, in a case heard by the country’s Supreme Court.

The action was brought by three clients of the tour operator, who demanded compensation for Novatours’ decision to discontinue their Egyptian vacations prematurely due to the riots that started in that country in Spring, 2014, and bring the travelers back to Estonia for their own safety.

The Estonian Supreme Court held that Novatours had the right to interrupt the tour and did so on a legal basis. In Nove’s words, “according to the Court, an increased threat of terrorist attacks in resorts can be considered as a circumstance of force majeure, which is why the provision of travel service may be dangerous and thus, difficult. In the present case, the same is confirmed by the warning of the Estonian Ministry of Foreign Affairs and the failure to comply with such a warning on behalf of the tour operator would have been an act of negligence by the tour operator. The Court did not find that the warning was given unreasonably or too easily. The Court decided that ignoring this recommendation in such a situation would have been an irresponsible act on behalf of the tour operator. The court also found that the safest way to protect the health and lives of the passengers after the increase of threat level was to return them immediately from Egypt and that is what Novatours did.”

Additionally, Nove reports, “the Supreme Court found that Novatours did not infringe its obligation to inform the passengers of these trip-related risks either before the conclusion of the contract or after it. The Court justified it with the fact that the situation in Egypt was well-known through media, which is why all passengers had enough information in order to make a calculated decision both in concluding the contract as well as in going on the trip, and Novatours did not have any additional information that had to be transmitted. The Court decided that the passengers have not made it credible that if Novatours would have informed them about the situation in addition to the information published in media channels, they would have decided to not conclude the contracts or not go on the trip.”

Finally, according to Nove, “the Supreme Court found that in a situation where a package tour must be discontinued in order to maintain the passengers’ safety, additional costs for returning the passengers must be divided between the passengers and the tour operator so that both parties bear the risk of such costs equally. According to the court, the passengers’ understanding that they don’t have to pay for the return trip was unreasonable and not-complying with the risk-sharing resulting from the nature of force majeure. If the return trip costs per passenger are bigger than his planned return trip costs, the tour operator is allowed to demand the passenger the compensation of half of the additional costs exceeding the planned return trip costs.”

The Nove team was led by Partner Urmas Volens.

Raidla Ellex has advised Assistor Oy Ab, a Veho Group company, on the sale of a 100% shareholding in its Estonian subsidiary Assistor AS to Autolink Baltics AS. 

Assistor, a Finnish automotive logistics company, specializes in vehicle and spare part deliveries. The company was founded in 1966 in Hanko to support the import of Mercedes-Benz. Today Assistor cooperates with more than 20 top car brands in six different locations. 

The Raidla Ellex team was led by Partner Risto Vahimets and Senior Associate Karl-Erich Trisberg.

Raidla Ellex did not reply to our inquiry about counsel for the buyers.

Editor’s Note:  After this article was published the Pohla & Hallmagi firm announced that it had represented Autolink Baltics on its acquisition of AS Assistor. 

Sorainen Estonia has advised Estectus, an SEB group property portfolio management company, on the sale of the ScalaCity office building in the Tallinn city center to Colonna investors. The newly renovated office building with a total lettable area of over 5,000 square meters will be managed by Colonna.

According to Sorainain, “the seller’s advisors included Sorainen, Catella and Seven Real Estate Advisors, with the purchase process led by Colonna’s own team.”

The Sorainen team was led by Partner Pekka Puolakka and included specialist Counsel Paul Kunnap and Associate Heili Puumann.  

The Estonian office of Tark Grunte Sutkiene (TGS) has advised strategic investor Viru Haigla on the acquisition of Karell Kiirabi from U.S. Invest.

According to TGS, Karell Kiirabi renders emergency medical services in the Harju-Viru county of Estonia and in part of the neighboring Ida-Virumaa county. In total, according to the firm, the company — which was founded in 1998 and launched its first ambulance crews in April 2001 — now has 18 emergency medical service crews and employs nearly 350 people. TGS also reports that “Viru Haigla (formerly named Tapa Haigla) renders health services mostly in Virumaa.”

The TGS team was led by Associate Partner Sander Karson, supported by Senior Associates Anu Sander and Ingeri Luik-Tamme. U.S. Invest did not retain external counsel on the deal.

Former Sorainen lawyer Kadri Kallas has joined Varul as an Associate Partner.

Kadri specializes in corporate/M&A, private equity, and venture capital. According to Varul, “she has advised strategic investors, private equity funds and companies included in their portfolios, as well as venture investors and growth companies on strategic investments, joint ventures, mergers, acquisitions and demergers, and provided general business advice. In addition to an eight-year career at Sorainen, she also worked for two and a half years in the London office of the US-based Vinson & Elkins law firm. 

According to Varul Managing Partner Martin Tamme, there is a symbolic significance to Kadri joining the firm. “Varul has historically been regarded as a reputable law firm specializing in litigation, although we are equally competent in advising on corporate law matters and transactions. Our recruitment of Kadri bears witness to an increase in the importance of this area – her experience will create added value for both our clients and our team.”