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Former Estonian Air employees' court action against Nordica fails

Mothballed Estonian Air plane.
Mothballed Estonian Air plane. Source: (Siim Lõvi /ERR)

Former employees of Estonia's former national airline Estonian Air who filed a claim in court against the new national airline Nordica to get more than €1.7 million worth of redundancy payments did not achieve the freezing of the airline's accounts, as the court said that such a step would obstruct Nordica's everyday economic activity.

"The court on December 22, 2017 issued a regulation, with which the application of the plaintiffs for securing an action was not satisfied. Thus, the court did not stipulate an arrest of the accounts of the defendant in the amount of €1.646 million as a measure to secure the action. The court found that applying such a measure of securing an action would be disproportionate to the defendant and would hinder the defendant's everyday economic activity. The court said that in case the court did arrest the money belonging to the defendant in banks in the amount applied for by the plaintiffs, it may significantly hinder the defendant's economic activity and foster the establishment of the defendant's insolvency," Kalle-Kaspar Sepper, sworn attorney from the Sirel & Partnerid law firm who represents the employees, told BNS.

"Based on the circumstance that the defendant has no other liquid assets that the claim could be turned to, the plaintiffs cannot apply for the application of any other measure to secure the action, which would actually ensure the fulfillment of a future court decision. Thus, the plaintiffs have been left without judicial protection regardless of the fact that the court in its regulation also noted that the seizure of accounts in the amount of €1.646 million may bring forth the defendant's insolvency," he said.

"The plaintiffs are still of the opinion that leaving the action unsecured may bring along a situation, in which a court decision made regarding this matter may not be possible to be fulfilled due to the insolvency of the defendant, as it appears from the defendant's annual report that their economic activity is not profitable and the financial situation of the defendant is worsening. According to the defendant's annual report, the defendant as of December 31, 2016 only had €3.208 million left of the €40 million share capital payment made by the state. The defendant has not contested this claim in their statements," the representative of the former employees of Estonian Air said.

The next court sitting is to take place on February 21.

Around 60 former employees of Estonia's former national airline Estonian Air which ended its operations in November 2015 in June 2017 filed a claim in court against the new national airline, Nordica, to get more than €1.7 million worth of redundancy payments.

"It is an extremely substantial dispute which is mostly being financed by DAS Oigusabikulude Kindlustuse AS on the plaintiffs' side due to many of the employees having insurance contracts with the insurance company. Without the support of insurance, it would have been impossible for the plaintiffs as private persons to go to court against such a big company," Sepper said then.

According to Sepper, it has been proven that Estonian Air was transferred into Nordica, therefore the latter is also responsible for all of Estonian Air's former employees. "According to the plaintiffs the transfer of the airline company was deliberate and planned," he said. He added that this is proven by evidence.

CEO of Nordica Jaan Tamm said that he is surprised that the employees have decided to turn to court against the company. "Nordica is a new company which started its operations from zero and which operates based on its own business plan and values. Of course, the legal action can also include legal nuances but these will be dealt with by our legal advisers," Tamm said.

Estonian Air ended its operations in November 2015 after the European Commission's Directorate General for Competition ruled that state aid provided to Estonian Air was not legal and the airline has to pay the money back to the state. Thereafter the airline filed for bankruptcy.

Editor: Dario Cavegn

Source: BNS

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