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Sorainen Represents Lux Express in Public Service Obligation Dispute with Estonian State

Sorainen Represents Lux Express in Public Service Obligation Dispute with Estonian State

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Sorainen has represented Lux Express and other bus operators in a public service obligation dispute with the Estonian state.

According to Sorainen, “Lux Express turned to court against the Estonian state in July of 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.” According to the firm, “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.”

Also, according to Sorainen, “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.”

Sorainen’s team included Partners Allar Joks and Carri Ginter and Senior Associate Kadri Harginen.

Editor's Note: On September 20, 2022, Sorainen announced that "on September 8, 2022, the European Court made a ruling that matches the view of our specialists – the law that has been applied in Estonia for the past 20 years and obliges bus operators to transport preschoolers and disabled individuals for free and without governmental compensation is illegal and must be invalidated."

The firm's updated team included Partners Allar Joks and Carri Ginter, Counsel Kadri Harginen, Associate Elina Mizerova, and Assistant Lawyers Katariina Kuum and Hanna-Elise Rahni.