Ellex Klavins successfully assisted Gulbenes Autobuss and Balvu Autotransports on contesting a procurement award involving a regional passenger carriage in Latvia before the Procurement Monitoring Bureau.
No further details were provided.
Ellex’s team was led by Associate Maris Brizgo.
Cobalt has advised capital300 and Chalfen Ventures on a EUR 5 million series A investment into Riga-based startup Lokalise.
Founded in 2017, Lokalise is a Latvian startup that focuses on translation and localization of apps, websites, games and more. According to Cobalt, “this is one of the largest ever first-time investments for a Latvian-founded startup.”
Cobalt’s team included Partner Indriķis Liepa, Senior Associate Diana Zepa, and Associates Agnese Gerharde and Ivo Maskalans.
Cobalt did not reply to our inquiry about the deal.
Editor’s note: After this article was published, Orrick informed CEE Legal Matters that it had advised Lokalise on the deal. The firm’s team consisted of, in London, Partner Chris Grew and Managing Associate Jason Wu; in Santa Monica, Partner Michael Yang; and in New York, Associate Mired Asfour.
Sorainen has advised Brette Haus on the preparation of a sales contract template for prefabricated folding houses.
Sorainen describes Brette Haus as “a recently established Latvian company which provides innovative and mobile building solutions.”
Sorainen’s team included Partner Ieva Andersone, Senior Associate Linda Reneslace, and Legal Assistant Gunvaldis Leitens.
The Lithuanian office of Glimstedt has advised UAB CGP Management on the sale of four private medical service operators in Lithuania to Latvia’s Repharm healthcare group. Cobalt advised Repharm on the deal.
According to Glimstedt, the four private medical service operators – UAB MediCa Klinika, UAB Kardiolita, UAB Bendrosios Medicinos Praktika, and UAB Svalbono Klinika – represent “the largest private medical service provider in Lithuania with a network of 33 clinics operating in 16 cities. The network includes Kardiolitos Klinikos in Vilnius, the only privately-run hospital in Lithuania providing for hospital care services.”
Glimstedt’s team was led by Partner Andrius Ivanauskas and included Associate Partner Edvard Gasperskij, Senior Associate Michailas Molis, and Associate Simona Butkute.
Cobalt’s team included Partner Elijus Burgis and Senior Associates Deimante Pagiriene, Julija Aleska, Julija Beldeninoviene, and Justinas Sileika.
The mandatory procurement of electricity (a “feed-in tariff,” or FIT) is one of the main schemes implemented in Latvia to support the production of renewable energy. FIT is a guaranteed right to sell a certain annual amount of electricity to the public entity for a fixed period of time at a price that exceeds the market price. The advantageous system is made available to combined heat and power (CHP) plants of high efficiency and producers using renewable energy. FIT is an important component of each renewable energy project, as renewable energy production without these rights is uncompetitive.
In 2017, a negative media publicity campaign was launched against several energy producers claiming that these producers did not fulfill their obligations to construct CHP units within the specified term. Consequently, Latvia’s Ministry of Economics started an investigation, ultimately concluding that these producers were not able to fulfill their obligations and withdrawing their FIT rights. The producers disputed the Ministry’s decisions by submitting claims to an administrative court. As a result, a number of court proceedings were initiated.
The main subject of the dispute was whether the producers were able to fulfill their obligations entitling them to maintain the FIT support; specifically, the requirement that producers must begin the production of electricity by a specified date.
Until 2017, in order to fulfil these obligations, producers had to submit permits to the Ministry that were issued by the electricity system operator entitling them to connect their CHP units to the system. These permits could be issued only following successful tests by the operator assessing the CHP unit’s performance and energy production. Thus, this permit was accepted as basic proof that the producer was able to ensure the production of electricity through the CHP process.
In addition, the Ministry acknowledged the ability to begin electricity production without installing full capacity of the CHP unit.
Many of the producers which were deprived of FIT support had received the necessary permits before the necessary date, but had not acquired the official acceptance certificate – the formal document issued by the building authority confirming that all construction has been completed. However, they had received letters from the Ministry informing them about specific obligations as well as written confirmation from the Ministry that they had successfully fulfilled those obligations.
In December, 2017, the Ministry changed its interpretation of the applicable regulations, in the process adding several additional obligations, such as: (i) a requirement that producers acquire the acceptance certificate and other documents confirming that the CHP unit was put into service; and (ii) the production of useful heat, which was delivered to the user.
During the proceedings, the producers referred to the consistent practice and interpretation applied by the Ministry for almost ten years, and to the Ministry’s explanations and confirmations regarding the obligations, as supporting what they claimed were legitimate expectations. Additionally, the producers noted that deprivation of FIT rights was disproportionate considering that they were otherwise unable to recover their investments in the energy production projects and thus put at risk of insolvency.
However, the court not only accepted the position of the Ministry, but also expanded the producers’ obligations. In several cases the court concluded that the producers had an additional obligation to put into service a CHP unit with full capacity and ensure the undisrupted production of the electricity as of the specified term.
The court applied the interpretation which had been established only in December, 2017. In doing so, the court concluded that producers acted contrary to the regulations and were not able to fulfill their obligations. The court also noted that even though some producers acted according to the Ministry’s instructions they still could not have legitimate expectations to actions which were not in compliance with the regulations.
The court’s ruling means that producers should be more careful and not rely only on the explanations provided by the responsible state institution, which alone are not enough to form the basis of legitimate expectations.
It should be added that a number of the aforesaid cases are now being adjudicated by the Supreme Court of Latvia. Therefore, there still is hope, although limited, that the court will recognize the legitimate expectations of the producers.
By Sandis Bertaitis, Partner, and Arturs Caics, Senior Associate, Fort Legal
This Article was originally published in Issue 7.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
Cobalt has successfully represented the Latvian Television public TV network before the Administrative District Court and Administrative Regional Court of Latvia against an association of political parties challenging the rules set by the network related to the allocation of airtime leading up to the elections of the 13th Saeima (parliament) as unlawful.
Cobalt reports that “the association of political parties claimed that it was unduly denied participation in the final debates of Prime Minister candidates,” and that “the court recognized the editorial independence of Latvian Television as a media outlet, which includes the freedom to determine the organizational rules of pre-election broadcasts and allocate time between politicians as it sees fit, as long as said organizational rules are equitable and each political party is provided the statutory guarantee to appear at least once on a pre-election broadcast that is a part of a public service remit. The organizational rules of pre-election broadcasts must be fair and equitable and should be made known to the public in a timely manner. Latvian Television had fully complied with all of the requirements above. The Court did not find misuse of editorial discretion by Latvian Television.”
Cobalt’s team was led by Managing Partner Lauris Liepa and Associate Inese Greke.
TGS Baltic has advised Moller Real Estate Baltic AS on the acquisition of a 2,300-hectare land plot near the Riga International Airport and a former British American Tobacco Latvia office-warehouse building located on it. Cobalt advised the unidentified sellers on the deal.
Moller Real Estate Baltic AS is a real estate property developer owned by the Moller family. The company reports a turnover of MNOK 400 and a portfolio value of MNOK 13,000. According to TGS Baltic, the property was acquired for the expansion of of the Moller Mobility Group car dealer network, which the firm describes as ”the leading car group in the Nordic and Baltic countries and one of the largest car companies in northern Europe. The group’s dealers sell such brands as Audi, Volkswagen, SKODA, and SEAT.”
TGS Baltic’s team included Partner Linda Strause and Associates Aija Kreicberga, Reinis Grunte, and Rudolfs Vilsons.
Cobalt’s team included Managing Partner Dace Silava-Tomsone, Partner Sandija Novicka, Specialist counsel Sabine Vuskane, Senior Associate Diana Zepa, and Associates Juta Guļkevica and Zane Caune.
The Latvian office of Sorainen has advised the Sarmants event planning association in an intellectual property dispute.
According to Sorainen, “the core of the dispute concerns rights to the concept of an event – a matter that Latvian case law has paid little regard to.”
The firm’s team was led by Partner Andris Taurins.
Sorainen and Loyens & Loeff have advised the Kekava ABT consortium on its agreement with Latvian State Roads to construct the Kekava Bypass part of the Via Baltica.
The decision to award the contract to Kekava ABT – consisting of TIIC, ACB, and Binders – came after the bidding phase of the project. Kekava Bypass will become a part of Via Baltica – a 1,722 kilometer road joining six countries and running from Prague to Helsinki.
According to Sorainen, “this is the first private-public partnership project in Latvia reaching a size of over EUR 100 million. It includes design, construction, operation and maintenance of the bypass from Riga to the Lithuanian border, and forms a part of the Trans-European Transport Network and Via Baltica.”
Sorainen’s team included Partners Lelde Lavina and Rudolfs Engelis and Senior Associates Jorens Jaunozols, Inese Heinacka, and Viktorija Smirnova-Cerkasa.
Editor’s note: On July 16, 2021, Sorainen announced that the deal between the Kekava ABT consortium and the Latvian state had closed.
Linklaters subsequently announced that it had advised the European Investment Bank, the Nordic Investment Bank, and Luminor Bank on their provision of financing for the construction of the Kekava Bypass project. The firm’s team consisted of Paris-based Partner Darko Adamovic, Counsel Vincent Poilleux, Managing Associates Alex Bluett and Pauline Portos, and Associates Youssef Berrada and Abdullah Konate, as well as Luxembourg-based Partner Melinda Perera and Managing Associate Alliance Mukengeshayi.
BDO Law has advised Deichmann-Schuhe Service-GmbH on its investment of EUR 500,000 in its Latvian subsidiary, SIA Deichmann Apavi, increasing its capital to EUR 1.15 million.
Deichmann is a footwear retail company with more than 4200 stores in 30 countries. BDO Law assisted the company with the launch of its first store in Riga in April 2019 (as reported by CEE Legal Matters on July 30, 2019).
BDO Law’s team included Senior Associate Rolands Valdemars and Associate Alise Valdemare.