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At the end of May, Estonian Air got final confirmation from Ontario Court, Canada, that the case between airplane maker Bombardier Inc. and Estonian Air/Republic of Estonia is over. At Bombardier’s request, the action was withdrawn with no financial claims.
The final decision also laid bare the size of said claim, not disclosed before by the parties – Bombardier had been claiming damages of $23.5m (over €18m) of Estonian Air and Estonian state.
In court, the Canadian plane producer was attempting to establish that, in 2011, the government interfered in decisions by Estonian Air thus forcing the latter to back out of buying five Bombardier planes as prescribed by initial contract. Instead, Estonian Air acquired planes of their rival Embraer.
As the main evidence to intervention by government, they presented to court an article in the daily Eesti Päevaleht where economy minister Juhan Parts affirmed to be in the know of plane purchasing negotiations and that, in his opinion, Bombardier had made a disadvantageous offer. Bombardier was also leaning on words by former Estonian Air CEO Tero Taskila about Embraer’s lobby in the government.
Bombardier concluded that, as to decisions by the airline, the government bore responsibility as majority holder. Nevertheless, in May of 2013, Canadian court ruled that the plane producer was not able to prove governmental impact on decisions of Estonian Air.
«Accusation by Bombardier regarding alleged state intervention into plane purchases was based on suspicions, rather than actual evidence,» wrote the judges. Also, the judge felt like the plane producer himself also knew that the company decided not to buy these planes as after the contract was waived their negotiator wrote to Estonian economy ministry vice chancellor Ahti Kuningas that Estonian Air «took a very stupid decision».
A couple of days after the court decision, both economy ministry and Estonian Air representatives confirmed to Postimees that the dispute between the two companies was still continuing. Indeed, Bombardier soon appealed.
This January, however, Ontario court again ruled in favour of Estonia. Once again, the court decided that the plaintiff was not able to substantiate its accusations, thus rejecting the appeal. At the end of May, letter from court reached Estonia about Bombardier deciding to annul the action, dropping its claims.
Via its press secretary Ilona Eskelinen, Estonian Air said they have claimed to have done nothing wrong from the start and that, when annulling the planes purchase they acted according to the contract.
«This is what we were counselled by legal advisers, as also confirmed by Ontario supreme court in 2013 already,» said Ms Eskelinen. According to her, the dragging court case had no effect on activities of the company.
According to economy ministry representative Rasmus Ruuda, for the state the court dispute ended this January and they never considered the action to succeed as the state wan no party to the transaction.
Bulk of legal costs is to be paid by plaintiff. At that, the judge ruled that pursuant to equal treatment principle Bombardier will not need to compensate defence lawyers’ business class flights while lawyers of plaintiff flew tourist class.
Plaintiffs’ tourist class tickets from Canada to London, for hearing, cost $1,200 while defence paid $7,000 flying business class. Thus, the Estonian side is only refunded $64,000 of money spent on defence, not $75,500 as asked.
Ms Eskelinen said Estonian Air will not contest that either.