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Cobalt Successful for Republic of Estonia in VEB Fund Case

Cobalt Successful for Republic of Estonia in VEB Fund Case

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Cobalt has successfully represented the Republic of Estonia during the judicial proceedings in the VEB Fund case, with the fund having been established 30 years ago to address the issue of banking funds blocked in the Russian Federation.

According to Cobalt, “Parnu Kalur Holding (bankrupt), Akke (in liquidation), Tartu Lihakombinaat (bankrupt), Volta, Latvias Kugnieciba, Saare Kalur, and Kreenholmi Valduse Aktsiaselts filed an action against the Republic of Estonia for the determination of fair compensation in relation to the activities of the Republic of Estonia upon the foundation of VEB Fund, and compensation for the certificates issued on the basis thereof.”

According to the firm, “the dispute dates back to almost 30 years ago and has received a lot of attention in Estonia ever since. In December 1992, the Central Bank of Russia advised the Bank of Estonia that, until the Republic of Estonia and the Russian Federation reached an agreement regarding the participation of Estonia in the payment of the external debt of the USSR, Pohja-Eesti Aktsiapank (North Estonian Bank) and UBB would not be able to freely use their money held in VEB Bank. By autumn 1992, both banks whose money was blocked in VEB Bank were insolvent and facing bankruptcy.”

“In order to ensure the sustainability of banking in Estonia,” the firm reported “the Riigikogu passed a resolution in January 1993, accounts of Estonian banks frozen in the Bank of Foreign Trade of the USSR, whereby the VEB Fund was established. The main function, according to the resolution of the Fund, was to find solutions for satisfying the claims of Estonian banks and other legal and natural persons regarding the accounts frozen in the former Bank of Foreign Trade of the USSR.”

Finally, Cobalt announced that “the Republic of Estonia [contends] the action in full, considering that the actions have been filed in violation of due term, and are also unreasoned as to the merits of the matter. The court agreed […] that the complaint was filed with great delay and repeatedly against one of the complainants, which is not allowed.”

Cobalt’s team included Specialist Counsel Kadri Matteus and Counsel Indrek Koolmeister.