OREANDA-NEWS. September 04, 2013. SORAINEN Estonia successfully advised Estonia’s leading taxi service provider Tulika Takso in a procurement dispute with the Estonian Ministry of the Interior. The Ministry organised public procurement for a framework contract for supply of taxi services. The Client’s tender was rejected by the Ministry of Internal Affairs.

 The court satisfied Tulika Takso’s complaint and found that the Ministry had no grounds for rejecting the tender. The judgment reaffirms that freedom to conduct business also applies to taxi services.

The dispute focused on whether a contracting authority would be entitled to reject a tender solely because some prices proposed in the tender exceeded the tariffs which the tenderer’s subcontractor drivers were offering “in the streets” during the time of the procurement. The Ministry of the Interior had misinterpreted the Public Transport Act and found that a tender including such prices was contrary to the law.

The Circuit Court ruled that Tulika Takso’s tariff offer was in accordance with the prescribed rules. A tenderer in a public procurement may agree upon different prices than those currently offered in the streets. On 8 August 2013, the Supreme Court declined to examine the Ministry’s appeal in cassation.

Veiko Vaske, senior associate with SORAINEN, representing Tulika Takso in the dispute, said the judgment was significant in its affirmation that long-term taxi service contracts are subject to the principle of free pricing.

The Court offered a clearer interpretation of tariff regulation provided in the Public Transport Act and the Tallinn municipal rules for taxi services, which are primarily aimed at consumer protection. As for public procurement law, the Court reaffirmed that a tender can be rejected only in case of noncompliance with clearly and unequivocally established rules. Importantly, the Court also noted that a tender in public procurement procedure may not be rejected solely because a tenderer claims that in reality it would provide the service at even lower tariffs than offered in the tender and thereby the contracting authority would get the service for a better price.

The client was represented by partner Carri Ginter, senior associate Veiko Vaske and associate Triin Valjaots.