Tallink demands Port of Tallinn to return €15 million

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Tallink ships- Source: Siim Lõvi /ERR

Harju County court has started proceedings regarding a claim by the Tallink Group, the Estonia shipping company operating Baltic Sea ferries, against the Port of Tallinn for the return of €15.4 million in port tax. The claim concerns the years of 2017 to 2019. The port, however, thinks the claim is unreasonable.

Shipping company Tallink finds that the Port of Tallinn has abused the favorable situation on the market and has established unreasonably high port taxes. Tallink wants some of these taxes to be returned. The claim is valued at €15.4 million.

"In our opinion, it consists of the returning of port taxes paid in excess in 2017, 2018 and 2019. But the effect of this lawsuit will certainly be significantly greater," Paavo Nõgene, Chairman of the Management Board at Tallink, said.

Tallink pays €20-25 million in port tax a year. These port taxes are based on the tonnage of a ship, the number of passengers it holds and the services used in the port.

The lawsuit is also based on calculations that compare the fees of Tallinn and other Baltic ports.

Nõgene said that the prices issued by the Port of Tallinn are significantly higher compared with other ports, taking into account the quality of purchasing power.

Last year, Tallink held negotiations with the Port of Tallinn for more than eight months. "We proposed very reasonable compromises. Unfortunately, they did not find support and therefore we had to go and ask the court to assess whether the pricing and pricing policy of the Port of Tallinn is correct," Nõgene said.

Nõgene said he cannot disclose the content of the compromises by referring to the litigation.

Tallink's demands are unreasonable, the Port of Tallinn says.

"We do not understand why just because we are an Estonian company, we should offer better prices when our infrastructure or services are equal or often better than in Helsinki or Stockholm," Margus Vihman, commercial manager at the Port of Tallinn, said.

Vihman referred to more innovative solutions and the proximity of the port to the city center.

"We know that Tallink's economic situation is not the best today due to the COVID crisis and the number of passengers has fallen very sharply. Our compromise would have been to temporarily reduce prices, but not only for Tallink but for all shipping companies to bring them out of this crisis," Vihman said.

"What we are not prepared to do, what we find to be clearly detrimental to both the company and our shareholders, is to challenge the accuracy of our prices," he added.

Both Tallink and the Port of Tallinn are listed companies. The litigation should not initially affect the shares.

"Litigation on this subject tends to be very long. The size of this lawsuit - 15 million euros - is very large, but if we divide this amount by the number of Tallink shares, which is 670 million shares, it comes to somewhere around two cents," Head of Baltic Equity Analysis of Swedbank, Marek Randma, said.

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Editor: Roberta Vaino

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