Supreme Court made a final decision on AS Tallinna Vesi’s appeal in cassation in the dispute between AS Tallinna Vesi and the Competition Authority
Today, on 12.12.2017, the Supreme Court made a decision on AS Tallinna Vesi’s appeal in cassation with regard to the tariff dispute with the Estonian Competition Authority. Supreme Court decided to partly uphold AS Tallinna Vesi’s appeal in cassation. However, the court stated that the CA is not bound by the agreement on the water tariffs, which was executed upon privatisation between the company and the City of Tallinn. Accordingly, both the Competition Authority’s 02.05.2011 decision to refuse to approve the water tariffs in accordance with the agreement executed upon privatisation and the Competition Authority’s 10.10.2011 precept requesting the submission of a new tariff application in line with the Competition Authority’s methodology, remained effective.
The appeal in cassation was upheld only with regard to one clause of the precept. The precept stated that the precept would be deemed to have been fulfilled only after the CA has approved the new tariff application. Supreme Court explained that whilst resolving the new tariff application, the Competition Authority and AS Tallinna Vesi may develop different views also regarding the aspects, which the Competition Authority did not address in the resolution of its precept. Although AS Tallinna Vesi has the obligation to submit a new tariff application in accordance with the Competition Authority’s methodology and the precept, the company cannot ensure the approval thereof by the Competition Authority.
Resulting from the final verdict, the interim injunction, which had been granted by the Estonian courts with regard to the Competition Authority’s precept to reduce the tariffs, expired. Tallinna Vesi will start preparations to comply with the precept in the manner that ensures conformity with the Estonian legal requirements and protects the interests of Tallinna Vesi’s shareholders. The company also intends to meet with the representatives of the Competition Authority. AS Tallinna Vesi will keep the shareholders informed of the next steps. The court decision in Estonian is available here.
In February 2017, AS Tallinna Vesi lodged an appeal in cassation with the Supreme Court against the Tallinn Circuit Court’s decision of 26th January 2017, in which Tallinn Circuit Court dismissed the Company’s claim against the Competition Authority as regards to the tariff dispute. On 20th June 2017, the Supreme Court accepted the appeal in cassation for proceedings. The decision made by the Supreme Court today cannot be appealed in the Estonian courts.
International arbitration proceedings are running separately and in parallel to the local court dispute. The hearings in the international arbitration proceedings were held in 2016. The procedural orders and decisions issued during the arbitration proceedings, subject to the redaction of confidential information, are available on the ICSID webpage.
AS Tallinna Vesi
Chief Financial Officer
Ph: (+372) 62 62 262