Supreme Court Refuses to Hear Complaint Against Tallinna Vesi
In a development favorable to the capital's water utility Tallinna Vesi, the Supreme Court said it will not review the Competition Authority's complaint regarding the company's legal interpretation of its pricing mechanism.
The agency has argued that the water utility's tariff mechanism is a civil law contract, which the company can not use in administrative court. However, Tallinna Vesi maintains that the rate-setting rules, which were established during privatization, are an administrative contract.
The Supreme Court's decision means the case will continue to be reviewed at the administrative court level.
The legal dispute began in June 2011, when the company appealed a ruling to Tallinn Administrative Court restricting it from raising rates for consumers.
Tallinna Vesi has long been criticized, including by the Chancellor of Justice, for its profit margins. The monopoly water supplier's profit margin rose from 42.8 percent last year to 64.4 percent this year. The Competition Authority has been questioning the legality of Tallinna Vesi's pricing policies, as well as the terms under which the company was privatized in 2001.
For its part, Tallinna Vesi has maintained that its policies have conformed to the terms of its privatization agreement, and that the authority's blocking the 3.5 percent rise constitutes a breach of that contract.