Category: Latvia

The complaint filed by the Fort law firm on behalf of the Latvian Renewable Energy Federation (LREF) has resulted in action from the European Commission.

Reacting to the LREF’s complaint, prepared by Fort, the European Union has decided to carry out an in-depth verification of the state aid provided by Latvia to state-owned major natural gas combined heat and power plants (CHP). The Fort-prepared complaint alleged that in responding to the lobbying efforts of the state-owned natural gas processing plants the rules for granting state aid had been continuously ignored, resulting in adverse impacts on the energy sector in general.

According to a Fort press release, “the Directorate General for Competition of the European Union, after reviewing the complaint drafted by Fort, acknowledged that it is necessary to request explanations from the responsible authorities of Latvia.” Subsequent to receiving the requested information the EC will decide on further actions.

According to Sandis Bertaitis, a Fort Partner in Latvia, “Commencement of the in-depth verification is a clear signal on the European Commission’s part that this issue is taken seriously and will not be disregarded. In this situation we will put maximum effort in cooperating with the European Commission in order to provide comprehensive information about actual and legal condition of the energy sector of Latvia.” 

Sorainen’s Latvia office has announced that the Latvian Competition Council decided not to initiate a case of possible abuse of dominant position in the activities of TV3 Latvia. The Latvian Lattelecom internet service provider and telecommunications company applied for the Competition Council’s review. 

TV3 is the most popular television channel in Latvia. Owned by the Modern Times Group, it was first launched in 1998. Lattelecome is owned by the Latvian government (51%) and the Scandinavian TeliaSonera company (49%).

In its decision the Competition Council concluded that conditions in the television program production and distribution market have significantly changed since the dominant position of TV3 Latvia was alleged. At the same time, the Competition Council stated that currently there are no reasons for suspicion regarding the application of an unfair pricing policy by TV3 Latvia. Likewise it was also not established that Lattelecom faced discrimination compared with attitudes towards the rest of the pay-TV operators in the market.

TV3 Latvia was represented by Sorainen Partner Ieva Azanda and Associate Tatjana Caika.

TV3 Latvia is a television channel targeted at a Latvian language audience owned by Modern Times Group. It was launched in 1998, but did not receive a terrestrial license until 2001. The channel has since increased its viewing share to become the most popular channel in Latvia as of September 2007, surpassing its closest rival LNT.

Sorainen announced that on May 29, 2014, the Latvian Competition Council approved the merger of the Polish Powszechny Zaklad Ubezpieczen (PZU) and the Latvian Balta insurance companies.

According to a statement released by the Sorainen, “approval was granted since the concentration in the non-life insurance services market will not change significantly as a result.”

PZU will acquire control over Balta through the merger. The acquisition of Balta’s shares is part of PZU’s international expansion plan, as the company wants to widen its territory of operation in the Baltic States. As stated in the merger notification, by acquiring Balta’s shares, PZU intends to become one of the biggest insurance market players in Latvia.

The Competition Council decided that as there are several other strong competitors in the Latvian insurance market, and PZU’s market share is small, the changes in the concentration of the Latvian non-life insurance services market due to the change should be insignificant.

PZU provides life and non-life insurance services and administers pensions, mutual investment funds, and saving programmes. PZU acquired Balta’s assets from the British and Welsh company Royal & Sun Alliance. Sorainen reports that PZU expects to take over insurance providers in both Lithuania and Estonia from Royal & Sun Alliance as well (reported on by CEE Legal Matters on April 18, 2014, and May 8, 2014.

PZU was represented by Sorainen Partner Ieva Azanda and Senior Associate Ieva Andersone.

Anri Leimanis, a Riga-based Partner of the Triniti law firm, is participating in the reform of State-Owned Enterprise governance in Latvia.

Triniti announced that Leimanis has represented the Latvian Chamber of Commerce and Industry in a meeting with an international team evaluating Latvia under the OECD Guidelines of Corporate Governance of State-Owned Enterprises. 

According to Triniti, “the aim of the evaluation is to assess Latvia’s state-owned enterprise sector according to the principles set forth in the OECD SOE Guidelines. As part of this process, the team met with the Latvian Chamber of Commerce and Industry’s to collect its views on the structure and application of the SOE corporate governance framework in Latvia.” The firm explained that Leimanis “provided the OECD experts with a wealth of information on SOE ownership, management as well as public and parliamentary debates on the reform in progress.”

Spilbridge has announced its role in a dispute involving the appropriateness and effectiveness of a freezing injunction and receivership order by the English High Court.

According to the Latvian firm, proceedings initiated in the High Court in London by Antonio Gramsci Ltd. and others against Aivars Lembergs, et al, resulted in a 2013 world-wide freezing injunction and a receivership order in support of the freezing injunction. A year later both orders remain unenforced in Latvia. Spilbridge has argued on behalf of its clients that the High Court’s injunction and order concern persons (and their assets) that are not involved in the proceedings, and thus that their enforcement is “manifestly contrary to public policy in Latvia.”

Lawyers from LAWIN, Sorainen, BLS Kronbergs & Cukste argued in opposition.

The Latvian Supreme Court has decided to refer the matter to the Court of Justice of the European Union for a preliminary ruling concerning the enforcement of the freezing injunction, and the enforcement proceedings of the receivership order will remain stayed pending a discharge application in the High Court in London.

Spilbridge explained that “it is hoped that the ruling of the Court of Justice of the European Union will render unenforceable in the European Union such freezing injunctions and receivership orders that affect such persons (and their assets) that are not involved in the proceedings before the English court.”

The Latvian Spilbridge law firm has prevailed in the Kurzeme Regional Court in a case involving the Latvijas Naftas Tranzits company and the Ventbunkers oil products transfer terminal at Latvia’s Ventspils port – one of LNS’s major shareholders.

The Court ruled, according to Spilbridge, that “the State Revenue Service was wrong in penalizing the Management for concealing the annual accounts in circumstances where the shareholders had not approved them at shareholders’ meetings.”

No other details were provided.

The companies were represented by Spilbridge Senior Associate Andrejs Eglitis and Associate Benita Balana.

Sorainen announced that it has advised Sanoma, a European consumer media and learning company, on the divestment of its Apollo online news service in Latvia.

The firm described the divestment as being “in line with Sanoma’s strategy of focusing its operations and divesting selected ownerships.” Apollo was acquired by Eesti Meedia, a leading media group in the Baltics.

Net sales for Apollo totaled around EUR 800 thousand in 2013. As part of the transaction, Apollo’s employees will transfer to the new owner. 

Sanoma employs over 10,000 professional employees in Europe, with key markets in Finland, The Netherlands, Belgium, and throughout Central & Eastern Europe. 

Sorainen’s support included assisting in drafting and negotiating the transaction documents.

Sorainen’s Latvia office is representing Bigbank in a dispute with the Consumer Rights Protection Center of Latvia.

The dispute involves commercial practices carried out by Bigbank when entering into consumer credit agreements.

Bigbank is one of the largest consumer lenders in the Baltics and also operates in Finland, Sweden, Germany, Austria and Spain. The Sorainen team is led by Partner Rudolfs Engelis and Associate Edvins Draba.

Sorainen’s Latvia office has advised the Association Sabiedriba par atklatibu – Delna (“Delna”), the Latvian branch of the global coalition against corruption, Transparency International, in a pro bono matter concerning the Latvian authorities’ plans to purchase speed cameras outside of public procurement procedure boundaries.

Back on September 25, 2012, the Cabinet of Ministers of Latvia decided to allow the country’s Public Procurement Law to be bypassed if the Ministry of the Interior decided to purchase speed cameras from a German company, Vitronic Dr.-Ing.Stein Bildverarbeitungssysteme. Delna intended to file an application with the Constitutional Court and to request that the European Commission assess the legality of this decision. Sorainen Latvia provided Delna with pro bono legal advice in the matter. The constitutional application failed, however, because Latvian law bars NGO from filing applications directly, and it did not gain the necessary support from Parliament members necessary to require them to do it.

However, the complaint regarding the possible infringement of public procurement rules by the Latvian authorities caught the attention of the Commission. And in addition, Delna, again in cooperation with Sorainen, held a press conference informing the media about the alleged non-compliance of the authorities with regard to the so called “security exemption” rule under Directive 2014/18/EC.

The Ministry of the Interior eventually decided not to proceed with the purchase of the speed cameras from Vitronic, officially on a financial basis.

On April 8, 2014, after investigating the case, the European Commission provided a response to Delna’s complaint. However, since the Latvian authorities had not implemented the project and had not purchased the speed cameras, the investigation against Latvia was closed. Nevertheless, the Commission informed the Latvian authorities that Article 14 of Directive 2014/18/EC should be strictly interpreted, and the Commission expressed its intention to monitor future applications of this exception by the Latvian authorities.

Sorainen Partner Agris Repss advised Delna through the process, with assistance by Senior Associate Raivo Raudzeps and Associate Andris Taurins.

Tark Grunte Sutkiene announced that one of its Partners, Ivars Grunte, has been re-elected as a member of the board of the Latvian Council of Sworn Advocates.

The decision on April 11 by the general meeting of sworn advocates represents the eighth time that the partner has been elected to the board. 

The Latvian Collegium of Sworn Advocates, as the independent professional organization of the sworn advocates of Latvia, unites all sworn advocates practicing in the country. The Board is the executive institution of the Collegium of Sworn Advocates, which leads the work of the collegium.