Harju County Court made an interim judgement today, finding that the claim filed by Tallinn University of Technology against Tallinna Vesi for compensation for damages resulting from the breach of obligations under the water service contract is generally justified, it isn´t expired, and the proceedings must continue regarding the amount of the claim.
Tallinna Vesi disagrees with the county court’s settlement. The company has found from the beginning of the dispute that it has not breached the contracts concluded with its clients and that its pricing has been in accordance with the applicable legal acts. The disputed situation was caused by an unclear regulation during the period from November 1, 2010, to November 30, 2019. The legal acts underlying the pricing of water services changed in 2010 – previously, the price was set by the local municipality, but as of November 1, 2010 the price had to be approved by the Competition Authority, which used its established recommended methodology for price approval.
At the same time, the company could not suspend the provision of vital water services and continued to operate based on previously concluded mandatory contracts and the best understanding of the interpretation of legal acts and the Competition Authority’s methodology, while seeking clarity from the court regarding their correct interpretation. Clarity was finally obtained by the Supreme Court’s judgement in 2017, after which a new price application was immediately submitted.
“Regrettably, several guidelines from the Supreme Court and our important arguments have been overlooked in today’s court settlement, and there are several conclusions with which we cannot agree,” noted Tallinna Vesi’s authorised representative, Attorney-at-Law and partner at Law Firm TRINITI, Tanel Kalaus.
“We would welcome legal peace in this case as well as in other similar ongoing disputes, as Tallinna Vesi’s goal has never been litigation. Unfortunately, during the nearly 15-year period that this case concerns, there was regulatory uncertainty that caused this dispute. This uncertainty has been confirmed by the Supreme Court in both 2017 and 2024. Unfortunately, reading the county court’s decision, it seems that this legal peace will not arrive soon,” noted Kalaus.
According to Kalaus, the county court has not addressed Tallinna Vesi’s statements regarding the reasonable time required to establish a new water service price (a question that is crucial in determining whether Tallinna Vesi has violated legal acts at all) during the dispute with the Competition Authority, during which new price applications were constantly submitted.
“In our opinion, TalTech’s claim cannot be justified. Tallinna Vesi has not committed a violation, as it submitted a new water service price application within the reasonable time referred to by the Supreme Court. Additionally, neither TalTech nor the persons who assigned their claims to TalTech have suffered any damage, as they have passed on all the alleged damage to their clients and financiers,” explained Kalaus.
Today’s interim judgement has not entered into force, and the parties have the opportunity to appeal it within 30 days of receiving the decision.
Until the Supreme Court’s judgement in the summer of 2024, all previous court judgements in this case and other similar disputes had confirmed that since the plaintiffs’ claims were unfounded, their claims should be dismissed. The opposing parties contested all the referred decisions. Although Tallinna Vesi believes that the Supreme Court’s 2024 judgement contradicted the Supreme Court’s previous practice and the clear intent of the legislator in several respects, the county court found that it must ground its decision on the Supreme Court’s 2024 judgement.
In today’s interim judgement the court did not assess the amount of the claim but found that the proceedings must continue in this regard. If it is proven that TalTech and the persons who assigned their claims to TalTech have passed on the alleged damage, they have not suffered any damage, and the claim is unfounded.
The company believes that the ongoing litigation will not have a significant impact on the company’s financial results.
The company’s previous stock exchange announcement on this case can be found on its website.
Melika Kiilmaa
General Counsel
AS Tallinna Vesi
(+372) 62 62 200
melika.kiilmaa@tvesi.ee
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