OREANDA-NEWS. September 21, 2012. AS Tallinna Vesi would like to inform its shareholders that on 18th September 2012, the Supreme Court decided not to review the Competition Authority's appeal against the Tallinn District Court's 31th May 2012 ruling that deemed AS Tallinna Vesi's Services Agreement an administrative contract, i.e. a public law contract.

This means that the Tallinn District Court ruling has now taken effect and AS Tallinna Vesi's tariffs case will now be remanded back to the Tallinn Administrative Court. As per the instructions of the District Court, the court of first instance will have to assess whether the Services Agreement is binding on the Competition Authority.

Under the Administrative Procedure Act (APA) unilateral changes of administrative agreements may only happen if this is absolutely necessary to avoid severe damage to a predominant public interest. Public law agreements are not rendered void simply changing a law (PWSSA). To date the Competition Authority has not presented any verifiable evidence to demonstrate that service quality standards would equal AS Tallinna Vesi's current standards for lower tariffs had it regulated the Company since 2001. While the company has done nothing but fulfil a valid public law agreement, unilaterally discarding this agreement when issuing a negative tariff decision could potentially be construed as a gross breach of procedure.

The ruling validates the company's complaint to the courts, although the Tallinn District Court has still instructed the Tallinn Administrative Court to assess whether the Services Agreement is binding on the Competition Authority. Should the Tallinn Administrative Court agree that a public law agreement concluded with a previous state appointed regulator is binding to the current state appointed regulator, the court is expected to annul the contested decisions on grounds of the Competition Authority's gross violation of disregarding important facts of the matter. If the Competition Authority is of opinion that the Services Agreement harms predominant public interest the authority should defend its views of the matter in a separate administrative procedure.Should the Competition Authority be able to prove that the Services Agreement severely damages a predominant public interests, the Company is entitled to compensation.

AS Tallinna Vesi has always fully complied with all the terms and conditions of the international privatisation contract, all of which were established by the Estonian Authorities themselves. In addition AS Tallinna Vesi has continuously provided independently verified evidence to prove that the international privatisation contracts have not led to unreasonably high profits, but on the contrary, secured higher quality standards, lower tariffs and allowed profit levels that are in accordance with international norms.