Tallinn water provider heads to human rights court in tariff dispute

Tallinna Vesi logo
Tallinna Vesi logo Source: Postimees/Scanpix

Publicly-listed Estonian water company Tallinna Vesi has submitted an application to the European Court of Human Rights (ECHR) concerning a tariff dispute with the Republic of Estonia, followed by a decision from the Supreme Court of Estonia, claiming that the state has violated the company's right to a fair trial and protection of property.

The application relates to a tariff dispute whereby a final unfavourable decision was made on 12 December 2017 by the Supreme Court of Estonia, the company has informed the Tallinn Stock Exchange.

According to the application, the Estonian state has violated Article 6 of the European Convention on Human Rights and Article 1 of Protocol No. 1 to the same convention.

Article 6 states that all are entitled to a fair trial. Tallinna Vesi claims, amongst other things, that the Supreme Court of Estonia violated its obligation to request a preliminary ruling from the Court of Justice of the European Union (ECJ) and additionally did not duly justify the refusal.

Article 1 of Protocol No. 1 states that every natural or legal person is entitled to the peaceful enjoyment of their personal possessions and property. Tallinna Vesi claims that the Estonian state's interference with the company's fundamental right to property was not proportional, and thus the state has violated the article.

The ECHR will first need to go through the registration process of the application from Tallinna Vesi. It will then check its admissibility . There are no specific deadlines by which the court must register the application or assess its admissibility.

In any case the ECHR is not an appeal court and cannot repeal the 12 December decision by the Supreme Court of Estonia; if it does however find a breach of Tallinna Vesi's fundamental rights, this may serve as additional grounds for protecting the interests of the company and its investors.

Tallinna Vesi is also still awaiting an award via international arbitration proceedings on whether the agreement on the encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and the Republic of Estonia has been breached.

The Administrative Law Chamber of the Supreme Court of Estonia to a large extent left unresolved an appeal filed by Tallinna Vesi against the Estonian Competition Authority, and decided that the latter is under no obligation to follow an agreement established between the Tallinna Vesi and the Tallinn City Government concerning the prices of water services.

The top-tier court found that the Estonian Competition Authority is not obliged to follow the agreement between the City Government and Tallinna Vesi concerning the prices of water services.

The amended law furthermore puts a stop to the basing of price determination on the methodology hitherto used by the City, hence why the Estonian Competition Authority has been unable to coordinate the price request from Tallinna Vesi and handing a precept to the water company to legally coordinate the price was justified.

The Estonian Competition Authority subsequently stated that following the court decision announced on 12 December, consumers will be able to claim amounts totalling tens of millions of Euros in compensation from Tallinna Vesi as the result of having to pay too high water rates over a period of several years.

Editor: Andrew Whyte

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