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Published: 2014-10-14 08:30:00 CEST
Tallinna Vesi
Company Announcement

AS Tallinna Vesi has commenced international arbitration proceedings against the Republic of Estonia

AS Tallinna Vesi and its shareholder United Utilities (Tallinn) B.V., registered in the Kingdom of The Netherlands, have commenced international arbitration proceedings against the Republic of Estonia for breach of the Agreement on the Encouragement and Reciprocal Protection of Investments between the Kingdom of The Netherlands and the Republic of Estonia (the Treaty).

As a signatory to the Treaty, the Republic of Estonia undertook the obligation to ensure β€œthe fair and equitable treatment” of investments protected by the Treaty. AS Tallinna Vesi claims that the Republic of Estonia has breached β€œthe fair and equitable treatment” requirement by changes to the law and activities of the public authorities which have deprived AS Tallinna Vesi from tariffs approved according to the Services Agreement concluded as part of the privatisation in 2001. Following three years of unsuccessful efforts by AS Tallinna Vesi to agree a solution with the Republic of Estonia, in May 2014 the Company requested that the Republic of Estonia comply with its obligations under the Treaty and gave notice of potential international arbitration proceedings against the Republic of Estonia if it did not do so. To date Estonia has been unable or unwilling to do so.

As the Republic of Estonia has not complied with its obligations under the Treaty, AS Tallinna Vesi has exercised its legal right to commence international arbitration proceedings. The Company is claiming compensation for potential damages of over 90 million euros for total losses over the lifetime of the contract to 2020. Of this amount, over 50 million euros of damage has been already caused by the refusal to permit tariff increases in the period of 2011 - 2013 and its ongoing impact to the period 2014 - 2020.

International arbitration is a procedure where an independent, international tribunal issues a final ruling on the dispute. Pursuant to the Treaty, arbitration would be carried out through the International Centre for the Settlement of Investment Disputes (ICSID), which is part of the World Bank Group.

         Mariliis Mia Topp
         AS Tallinna Vesi
         Head of Communications
         Tel: (+372) 62 62 275
         mariliismia.topp@tvesi.ee