We successfully represented Saaremaa Laevakompanii (an Estonian-based shipping company) before three instance courts in a dispute over the recovery of a compromise agreement of over EUR 60 million.
Interest of creditors
The dispute started in 2018, when the plaintiffs filed claims against Saaremaa Laevakompanii (SLK) to revoke specific clauses of the compromise agreement in recovery, claiming that they were damaging the interests of SLK’s creditors.
The court found that an individual single clause of the compromise agreement cannot be annulled separately from other clauses of the compromise agreement and that the claims submitted are unfounded. The latter means accordingly that the company has more assets than liabilities and is not in bankruptcy. The termination of bankruptcy proceedings gives SLK the opportunity to continue its economic activities and participate in public procurement for the organisation of inter-island passenger transport.
A pioneering dispute
According to Sorainen lawyer Mari Agarmaa, who represented SLK in court, in addition to the significant economic impact (ca EUR 60 million) of the court decision, it is an important court precedent in so far as the current Bankruptcy Act does not regulate partial recovery of transactions. This court decision provides additional instructions for the partial recovery of a transaction, and creates a balance between the interests of creditors and the interests of the debtor in a situation where the creditor wishes to challenge a clause in a concluded compromise contract, while the performance to the creditor remains valid, in order to ensure that the creditor’s performance is returned to them.
Additionally, the decision affects the pending criminal proceedings relating to causing insolvency. It is not possible to penalise anyone for causing insolvency in a situation where insolvency has ceased and bankruptcy proceedings have ended.
Our services and client team
Saaremaa Laevakompanii was represented throughout the dispute before all instance courts by our partner Carri Ginter, and supported by senior associates Mari Agarmaa and Piret Schasmin, and associate Liisa-Maria Puur.