The Italian company with Indian owners, Datasel, sent a proposal to the government, the Ministry of Defense and the Center for Defense Investment (RKIK), stating that it wishes to resolve the situation constructively and is prepared to deliver all ammunition specified in the contract. The letter was addressed to all ministers, including Prime Minister Kristen Michal, RKIK director Elmar Vaher, two other officials, and 17 members of parliament.

In the letter, the company outlines steps for reaching a solution.

"Datasel's position is clear: we remain willing and prepared to complete the contractual supply. Our objective is not to prolong the present dispute, but to establish a practical framework that protects the interests of Estonia, objectively addresses the outstanding technical and contractual matters, and enables the underlying defence procurement requirement to be fulfilled," the letter states.

The company added that it has already taken significant financial commitments and organized supply chains to fulfill the contract. "Significant resources have been committed towards raw materials, components, manufacturing and associated procurement activities necessary for completion of the supply," Datasel noted.

According to Datasel, it is able to fulfill its contractual obligations immediately once the financing framework is set. The company is willing to agree on a schedule with Estonian authorities and ensure transparency in production, inspection and delivery.

Estonian authorities have said that the ammunition delivered so far by Datasel was of poor quality. Datasel says it is ready to ensure that the ammunition meets Estonia's required standards.

"Datasel's objective is not simply to complete the outstanding quantities, but to complete them through a controlled and verifiable process capable of providing Estonia with confidence in the material ultimately delivered," the company stated.

Datasel says it is willing to cooperate with the relevant Estonian agencies to ensure quality control, inspection and testing according to specific requirements before further deliveries are made.

In the letter, Datasel proposes that representatives of the Estonian government and RKIK begin dialogue immediately to reach an agreement. First, a decision must be made regarding the ammunition already delivered, and it should receive an independent technical assessment. What happens with the remaining deliveries must be agreed together, including how inspection, testing, acceptance and documentation will be carried out.

Datasel also wants both sides to work toward resolving contractual and legal disagreements. For this, the company proposes forming a joint working group to handle technical, contractual, financial and logistical details and prepare a roadmap and timeline for moving forward.

The letter also notes that although Datasel does not withdraw its positions in the ongoing legal dispute, these disagreements should not prevent both sides from seeking a mutually acceptable solution through dialogue. "Datasel therefore respectfully expresses its readiness to engage directly with the appropriate representatives of the Government of Estonia and RKIK," the letter states.

Background

In 2024, the Estonian Center for Defense Investments (RKIK) signed four procurement contracts with Datasel S.R.L., an Italian company acquired earlier that year by Indian-owned Neco Defence Munitions. Despite neither Datasel nor its parent firm having any prior track record of manufacturing or selling artillery shells, RKIK wired roughly €70 million in advance payments.

The contracts meant to deliver desperately needed ammunition to Ukraine using EU European Peace Facility funding suffered severe delivery delays. Ammunition that did arrive was flagged as incomplete and of substandard quality, leading RKIK to terminate the agreements and launch legal efforts to recoup the money. Datasel has denied wrongdoing, claiming it delivered tens of millions of euros' worth of goods and was left with financial losses.

The European Public Prosecutor's Office has since launched an investigation into the use of European Peace Facility funds by Estonia.

The scandal was part of Minister of Defense Hanno Pevkur's recent decision to resign, alongside wider accounting and oversight issues at the Estonian Defense Forces and other parts of the ministry's administrative area.

Full contents of Datasel's letter in English:

--

Follow ERR News on Facebook and X and never miss an update!