Estonian Railways wins €15 million suit

TALLINN — Russian freight rail company Spacecom was ordered Monday to pay more than 240 million krooni (€15.3 million) to Estonian Railways Ltd by the Harju County Court.

The legal dispute between Estonian Railways Ltd and Spacecom kicked off in Jan. 2005, when Spacecom stopped the payments for Estonian Railways, violating a rail access contract the two companies had signed. Spacecom  now has to pay its debt of 119 million krooni (€7.6 million), and 122 million krooni (€7.8 million) for surcharge plus the court expenses 8.7 million krooni (€ 562,352).

A complicated case

Spacecom, whose shares are 61 percent owned by Globaltrans Investment PLC, the largest private freight rail transportation group operating in Russia, actually initiated the legal action in Sept. 2004 against Estonia’s state-owned company Estonian Railways Ltd to clarify whether they have to pay the Estonian Railways such high amount. Estonian Railways Ltd then filed a counter-suit, which ended up winning.

“It was somewhat complicated. The base argument about Estonian Railways wanting to receive the money that was owed was simple, but Spacecom found that they do not have to pay, so the international expertise was also involved who eventually supported Estonian Railways’ stand, ” Leon Glikman an attorney for Glikman & Partners, who represented Estonian Railways Ltd, told Baltic Reports.

Glickman did not know whether the decision will be appealed or not but said that if Spacecom will decide to do so, then they will not have to make the payment until the court will review the evidence.

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