We represent Lux Express and other Estonian bus operators in a dispute with the Estonian state.
Lux Express turned to court against the Estonian state in July 2019 seeking for the obligation imposed by the Public Transport Act to carry preschoolers and people with disabilities free of charge on commercial routes without any compensation from the state to be declared unconstitutional. Soon after, three more Estonian bus companies applied to the administrative court with a similar complaint. The Tallinn Administrative Court decided to send the matter to the Court of Justice of European Union.
In its latest assessment, however, the European Commission confirmed to the Court of Justice of European Union that the law that has been in force in Estonia for 20 years violates European law. Lux Express will be seeking compensation from the state for the loss of revenue in the amount of nearly EUR 2 million.
According to Ingmar Roos, a member of the board of Lux Express, this is a significant breakthrough in ending a long-lasting unfair and unlawful situation: “We did not turn to the court against people with disabilities and preschoolers and we’re not questioning the state’s right to offer them more favorable conditions for using public transport. We challenge the unfair system developed by the state. Carriers from whom the state is buying transport service on the basis of public service agreements are compensated for transporting passengers entitled to free travel through the price per kilometer; however, carriers operating routes that function on ticket revenues alone must also service the same passenger groups without any compensation.”
Our partner Carri Ginter lauded a judge of the Tallinn Administrative Court for sending the matter to the Court of Justice of European Union. “The state was trying to claim until the very last minute that the EU law does not apply in this case. From now on, the dispute can only concentrate on the size of the compensation payable by the state to bus operators,” Ginter said.
The Estonian Ministry of Economic Affairs and Communications representing the state in the court proceedings thus far has maintained the position that the said obligation does not constitute the imposition of a public service obligation.
The position relayed to the Court of Justice of European Union by the European Commission clearly stipulates, however, that the obligation imposed on companies carrying passengers on a commercial basis to carry passengers in certain categories free of charge, as is currently the case pursuant to the Public Transport Act, constitutes a public service obligation. The European Commission also assumed the position that the section of the Public Transport Act stipulating that the free-of-charge carriage of passengers is not to be compensated to carriers is incompatible with EU law. Thus, the European Commission’s position is essentially that the regulation in effect in Estonia since 2000 is unlawful.