Tallink Grupp brings legal action against Port of Tallinn
On 1 March 2021, AS Tallink Grupp filed a legal action against AS Tallinna Sadam (Port of Tallinn) at the Harju County Court with a claim in the total amount of EUR 15.4 million. With the action Tallink Grupp is demanding that the Port of Tallinn reimburses the company a part of the excessively high fees that were paid for the port services in the Old City Harbour (Tallinna Vanasadam). According to the Estonian Competition Act, an undertaking having a dominant position on a goods market is prohibited from directly or indirectly establishing or applying unfair purchase or selling prices or other unfair trading conditions, Tallink Grupp says in a press release.
The filed claim includes fees paid by Tallink Grupp in 2017, 2018 and 2019, which were well above a fair price. It is the view of Tallink Grupp that in relation to port services offered to passenger vessels in Tallinn Old City Harbour, the Port of Tallinn has imposed excessively high prices and thereby abused its dominant market position on the market for offering port services in the Old City Harbour.
Commenting on the decision to take legal action, Paavo Nõgene, CEO of Tallink Grupp, said:
“Tallink Grupp and the Port of Tallinn have held negotiations to ensure equitable pricing for the services provided in Tallinn Old City Harbour for quite some time already, including already in 2018. We believe that the Port of Tallinn has a dominant position in various goods markets, primarily in the market for providing port services in Tallinn Old City Harbour.
“We are grateful to the Port of Tallinn for their expression of goodwill in trying to reach a compromise agreement that would satisfy all parties. However, the negotiations and compromise proposals have unfortunately not resulted in an agreement and satisfactory solution. Tallink Grupp believes that with fair and transparent fees the Port of Tallinn would also make a more significant contribution to a speedier recovery of Estonian tourism and related sectors.
“Tallink Grupp has attempted to solve this issue and reach an agreement with the Port of Tallinn through negotiations over several years. As negotiations in the past and also during the last eight months, with an entity that holds a dominant market position and is listed on the stock exchange, have not led to a solution, then Tallink Grupp considers it necessary to establish via court proceedings whether the Port of Tallinn provides its services on a fair and transparent basis. In our experience the fees charged in Tallinn Old City Harbour are some of the highest in the region. This fact is corroborated by previous legal analyses and expert assessments, according to which the port fees charged by the Port of Tallinn in Tallinn Old City Harbour (considering the PPP) are considerably higher than fees charged for comparable services in Helsinki and Stockholm, for instance. According to the analyses, the fees charged by the Port of Tallinn are on average at least 20% higher, though in most cases the percentage is even higher.
“Estonia is a maritime nation which means that Estonian ports are an important gate to the world. We believe that unfair pricing of port services has a far-reaching negative effect on the wider Estonian economy as it limits the frequency of traffic and as such hinders the creation of more frequent and environmentally friendlier connections between Tallinn and other major centres of the region.”
AS Tallink Grupp is one of the leading providers of passenger transport and cargo transport services in the northern part of the Baltic Sea region. The company owns 15 vessels and operates a number of ferry routes on the Baltic Sea under the brand names of Tallink and Silja Line. AS Tallink Grupp employs around 4000 people in Estonia, Finland, Sweden, Latvia, Russia and Germany. In 2020, the year of the global COVID-19 pandemic, Tallink Grupp provided services to 3.7 million travellers and transported nearly 360 000 units of cargo. The shares of Tallink Grupp are listed on the Tallinn Stock Exchange and Nasdaq Helsinki Stock Exchange.
