Tallinna Vesi Takes Estonia to International Arbitration Tribunal (2)
AS Tallinna Vesi, the capital's water utility, and its controlling shareholder United Utilities (Tallinn) B.V. have launched international arbitration proceedings against the Republic of Estonia for what the complainants say was a breach of the bilateral investment treaty with the Netherlands.
When Estonia signed the treaty in 2001 it undertook the obligation of ensuring the fair and equitable treatment of Dutch investments. Tallinna Vesi insists that Estonian authorities have refused to honor the terms and conditions that the treaty set by imposing restrictions to planned price hikes in 2011.
The initial price hike request was rejected as the authority found the company's margins were too high and took into account unfounded expenses.
Tallinna Vesi has now commenced arbitration proceedings, demanding a compensation of 90 million euros that would cover the company's losses between 2011-2020.
International arbitration is a procedure by which an independent tribunal will issue a final ruling on the dispute. It will be carried out through the International Center for the Settlement of Investment Disputes, which is a part of the World Bank.