OREANDA-NEWS. January 21, 2013. On 31st of August, 2012, Riigi Kinnisvara AS (RKAS), a 100% state-owned company, sued AS Tallinna Vesi for damages in the amount of 301 987,35 eur for charging Tallinn prison a commercial tariff which RKAS alleges is an illegal tariff.

Since RKAS’ original claim was unclear, the Harju County Court (civil court) requested that it be specified by 10th January, 2013. RKAS has now specified that they consider having allegedly incurred those damages as a result of AS Tallinna Vesi implementing City of Tallinn’s tariff regulations as per the international privatisation contract, and as such AS Tallinna Vesi has allegedly imposed illegally discriminating water prices between legal and domestic customers.

RKAS claims that the City of Tallinn’s tariff regulations were null and void and AS Tallinna Vesi should not have applied them. According to RKAS's claim, AS Tallinna Vesi should have breached the terms and conditions of its privatisation contract, the underlying conditions of which RKAS now alleges illegal. According to RKAS, AS Tallinna Vesi should have charged domestic and not commercial tariffs for Tallinn prison and RKAS, both of whom are public legal persons.

On 31 August 2012, RKAS brought a case in the administrative courts on similar grounds against the City of Tallinn to challenge the same tariff regulations of the City of Tallinn. This means that RKAS is challenging the same City of Tallinn’s dual water tariffs against multiple defendants in multiple courts. The administrative courts of the first and second instance have both already held that there was no legal grounds for RKAS’s claim. This latter case is currently pending admittance to the Supreme Court for final review.

Dual tariffs have been in place in Tallinn since the 1990s and Tallinn prison has always been charged a commercial tariff both prior to and since privatisation. AS Tallinna Vesi firmly believes in the principal of respect for its privatisation contract and has always followed the City of Tallinn’s tariff regulations that were fully in accordance with the Public Water Supply and Sewerage Act with respect to Tallinn prison and RKAS.

AS Tallinna Vesi would like its shareholders to know that it completely disagrees with this further attempt to break one of the terms and conditions that underpins the whole international privatisation contract. AS Tallinna Vesi will take all necessary actions to protect the international privatisation contract and the Services Agreement, which has been declared a public law contract.