"Our message is simple: Datasel had the capacity and access to the supply chain needed to fulfill these contracts. The goods were manufactured, inspected and delivered or made available for pickup and subsequent allegations concerning quality and the termination of the contract remain disputed. No court or arbitration tribunal has yet ruled on these issues," the statement said.

The statement explained that behind the contract numbers are engineers, factory teams and specialized suppliers who committed their time, materials and capital in good faith. However, goods sitting in warehouses generate additional costs and Datasel believes a better solution would be to complete the work safely and transparently rather than allow a resolvable commercial dispute to turn into years of litigation.

According to Datasel, public discussion has portrayed the matter as involving just a single €70 million contract, but the company said this is not the case.

"The National Audit Office reported €71.6 million in disputed procurement volume across all suppliers and a €59.8 million advance payment to the largest supplier. Former Defense Minister Hanno Pevkur separately described the amount specifically associated with Datasel as approximately €60 million. Datasel's contract and accounting records show that its contracts with RKIK were worth more than €150 million, of which advance payments received amounted to approximately €59 million, while goods delivered and invoiced were worth approximately €58 million," the spokesperson wrote.

According to the spokesperson, RKIK and Datasel exchanged inquiries, written proposals, technical information and contract terms over a period of several months, while Datasel disclosed its supply chain, manufacturing sources, countries of origin, product locations and technical capabilities. The final contracts were preceded by a pre-purchase agreement and RKIK representatives visited the relevant manufacturing facilities before placing the order and conducted additional inspections during the contract period.

"RKIK has subsequently said that its current team cannot find documentation showing how the initial contact with Datasel was established or how the company was selected. This apparent gap in RKIK's records management is not evidence that Datasel concealed information or that the subsequent months of negotiations and inspections did not take place," the spokesperson said.

"Datasel is an Italian defense industry supplier founded in 2005. Its technical foundation is built on the experience and industry network of founder and continuing technical collaborator Sandro Pazzini whose previous work at established European defense companies included major, high-value programs. Datasel was acquired by Neco Defence Munitions in 2024, adding industrial resources and the broader group's expertise in metallurgy, casting, precision engineering and high-precision machining," the statement said in its description of the company.

Datasel: A website is not a credible indicator of industrial capacity

Datasel says it operates as a supplier, manufacturer and integrator through established manufacturing partners, including experienced ammunition component manufacturers that are active in the industry and also supply other European defense customers.

"This networked model is common in the modern defense industry. A company's website or historical employee headcount is not a reliable indicator of the industrial capacity available through its contracted supply chain. Datasel has fulfilled contracts worth more than €110 million and, since its acquisition by Neco Defence Munitions, has several orders of a similar nature pending," the statement said.

The claim that Datasel did not deliver anything is contradicted by public information, the statement said, adding that former minister Pevkur confirmed that deliveries had taken place and that tens of millions of euros worth of material was stored at a warehouse in Europe where ministry auditors and internal control staff physically inspected it.

"Under the contracts, several batches were presented for inspection. RKIK representatives inspected the relevant batches and authorized them for shipment. The goods were then picked up or made available for pickup. Datasel also made substantial advance payments to manufacturing partners, continued procuring materials and maintained inventory and supplier commitments related to the orders. Manufacturing, inspection, release, acceptance and final delivery to Estonia are separate stages and reporting should not reduce them to a single claim that nothing was delivered," Datasel's press representative wrote.

Datasel: RKIK announced contract termination before communicating its concerns

Datasel disputes allegations of quality issues.

"According to our records from the time, the specific concerns now being made public were not formally raised until weeks after RKIK had issued notices terminating the contracts. This sequence of events matters: allegations raised later cannot, without evidence, establish that a demonstrated quality defect was the actual reason for the earlier termination of the contracts — rather, they appear to be a justification sought after the fact," the statement said.

According to Datasel, a proper technical claim should identify the defective batch, the contractual specification, the sampling and testing method, the experts' findings, the written notice and an opportunity to remedy the defect. None of these issues has been finally adjudicated by a court or arbitration tribunal. Datasel said it will submit complete, dated documentation in the relevant proceedings, including inspection reports, correspondence, delivery records and termination notices.

"Without admitting that any product delivered was noncompliant, Datasel remains prepared to honor the agreed warranty. Any genuine noncompliance that is properly identified, documented and raised within the warranty period will be investigated and, if confirmed, the product will be repaired or replaced in accordance with the contract," the company said.

RKIK has acknowledged that the expiration of the external funding window was a reason for terminating the contract. Datasel asked RKIK to inspect additional finished goods and according to the company, RKIK did not participate in those inspections after the relevant EU funding or authorization window had closed.

"A funding deadline is not, in itself, evidence of improper performance by a supplier. Nor does it erase goods already manufactured, costs already incurred, warranty procedures or damages resulting from the termination of the contract," the statement said.

RKIK's assertion that Datasel's counterclaim may be "tactical" is speculative, according to the company, particularly since RKIK has also acknowledged that it has not reviewed the underlying documents.

"Datasel's claims are based on contracts, correspondence, inspection and delivery records, advance payments to suppliers, inventories and evidence of damages. These materials will be submitted to the competent Estonian court and to international arbitration, rather than debated through selective public comments."

Datasel wants to restore RKIK contracts

Without prejudice to the company's claims and legal position, Datasel is asking RKIK to immediately enter into good-faith discussions aimed at reinstating the contracts or reaching an equivalent structured agreement to complete them. Datasel is prepared to engage its supply chain, present the remaining goods for inspection in accordance with the contracts, address any properly documented warranty issues and fulfill its remaining obligations within a mutually agreed and commercially reasonable timeframe.

"This proposal is made without any admission of breach of contract, delay, liability or noncompliance. Any resolution would also require corresponding funding, approvals, inspection, acceptance, transportation arrangements and payment terms on the buyer's part," a Datasel representative wrote.

The statement also addressed journalists, asking them to examine the matter fairly.

"We are not asking the media to adjudicate a legal dispute or take sides. We are asking that the chronology, the deliveries and the available path toward a resolution receive the same scrutiny as the allegations. If Estonia needs ammunition and Datasel remains ready to supply it, a serious discussion about completing the contract should not be ruled out from the outset."

Datasel said it is prepared to complete the contract.

"If the ammunition is needed and Datasel remains ready to complete delivery, the Estonian public deserves to know why the door to fulfilling the contract remains closed. We are ready to sit down at the table, listen and do our part to finish what was started."

It emerged last Wednesday that Estonia sought to buy shells for Ukraine and paid a total of €70 million in advance to Indian businessmen, who own the company, who had reportedly never sold a single shell before. RKIK terminated the contract and claims the company only delivered an incomplete shipment of low-quality components.

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