Wed, Oct
59 New Articles

Varul and Raidla Ellex Both Claim Success in Estonian Supreme Court in Challenge to Administrative Reform Act

Varul and Raidla Ellex Both Claim Success in Estonian Supreme Court in Challenge to Administrative Reform Act


Both Varul — the Estonian office of Tark Grunte Sutkiene — and Raidla Ellex are reporting success in a dispute before the Estonian Supreme Court involving the country's Administrative Reform Act. Varul represented 23 smaller municipalities claiming that the Act violated their constitutional rights, while Raidla Ellex defended the Act on behalf of the Government of the Republic of Estonia.

The dispute involves the Estonian government's plans to have small municipalities (those with fewer than 5000 inhabitants) in the country merge with neighbors to improve municipal management and improve the quality of public services. The government's plan regarding which municipalities should merge with which provides incentives for those agreeing to comply willingly, whereas those which refuse would — while still ultimately being forced to comply — be denied those financial incentives.

Varul Reports Success in Challenge to 5000-Inhabitant Provision

According to Senior Partner Paul Varul, who led the Varul team on the matter, the Supreme Court's decision was very favorable to the municipalities bringing the constitutional review. "The Supreme Court agreed with the applicants that the population requirement of 5000 is not a relevant factor and there are other criteria."

According to Varul, the Supreme Court ruled that if the municipalities can prove that they are still administratively capable, despite reporting a population of less than 5000, it is possible to prevent the forced merger.

"The most important conclusion is, and the Supreme Court has also properly addressed it, that it is possible for those municipalities with fewer than 5000 inhabitants to continue independently. It is also possible for municipalities to challenge the forced merger in court," he explained.

Raidla Ellex Reports Success in Overall Constitutionality

Although Varul claimed success in having the Court clarify that the 5000-resident minimum is just one of several criteria to be considered and that the targeted municipalities were entitled to a chance to prove that they are otherwise administratively capable, Raidla Ellex also announced that its defense of the Administrative Reform Act on behalf of the Estonian Government was successful.

According to Raidla Ellex, "pursuant to the administrative reform adopted by the parliament, local governments had to initiate merger negotiations by October 1. Twenty-six local governments requested that the Supreme Court repeal the provisions of the Administrative Reform Act. The Constitutional Review Chamber of the Supreme Court found that of the provisions disputed by the 26 local governments only subsection 24 (1), which set the limit of covering the costs of the merger initiated by the government at EUR 100,000, is in conflict with the Constitution. The Chamber repealed the said provision. 

The Raidla Ellex team included Senior Associates Juri Raidla and Arne Ots and Associate Martin-Johannes Raude.

Estonian Knowledge Partner

COBALT is closely integrated alliance of top-tier law offices in Estonia, Latvia, Lithuania and Belarus, making us one of the largest law firms in the Baltic market. 

COBALT is a trusted partner for daily matters and complex large-scale transactions and disputes. The firm’s broad spectrum of expertise and established position as the market leader give a comprehensive basis for providing advice on special areas of business law.

We advise top international and regional businesses, financial institutions, state and local governments, and the region’s most promising start-ups. We offer leading-edge solutions in key industry sectors: Consumer Products, Trade & Distribution, Real Estate & Construction, Pharmaceuticals & Healthcare, Energy & Utilities, Communications, Media & Technologies, Financial Services, Transport & Logistics.

COBALT has been named Baltic Law Firm of the Year 6 times. We were recognized as the Most Innovative Law Firm of the Year 2019 in the Baltics at the IFLR European Awards in London. COBALT also won CEE Legal Matters Deal of the Year Award for Estonia, Latvia, and Lithuania, as well as the overall Baltic Deal of the Year, at the 2019 CEE Legal Matters Awards. We have received multiple awards from the Chambers Europe, IFLR, The Lawyer and Mergermarket and we are regularly listed amongst the top performing M&A legal advisors in the Bloomberg, Thomson Reuters and Mergermarket deal tables

More information on Cobalt can be found at www.cobalt.legal

All News about Cobalt can be found here.


Our Latest Issue