Tallink Grupp and Port of Tallinn reached compromise agreement in a court dispute
On February 11, Tallink Grupp and Port of Tallinn reached a compromise agreement, which ends the court dispute between the two parties which started in March 2021 over the port dues offered to passenger ferries in the Old City Harbour, the Port of Tallinn says in its press release. According to the compromise agreement, Tallink Grupp will waive all submitted claims against the Port of Tallinn in this case and the Port of Tallinn will change the port dues applied to passenger ferries operating regular routes to and visiting the Old City Harbour. New port dues will apply to all ferry operators operating regular routes to the port.
As a result of the compromise agreement, the Port of Tallinn will reduce the tonnage charge and passenger fee for the regular lines passenger ferries in the Old City Harbour by 10% and will increase the discount offered to vessels based on their Environmental Ship Index (ESI) (to 14% for passenger vessels whose ESI value is 80 or higher, and to 8% for passenger vessels whose ESI value is between 65 and 79.9). The mooring charges, waste fees and vehicle cargo charges will not change.
From 2025 onwards, The Port of Tallinn has the right to increase the port dues that are a part of this agreement in the event of changes in theConsumer Price Index (CPI) as follows: in the event of the CPI increasing by up to 6% to the extent of the CPI change, but no more than 2% annually; in the event of the CPI increase by more than 6% the increase may be 2% plus those percentage points for which the CPI annual increase is higher than 6%. In the event of the CPI decreasing, the Port of Tallinn does not have the obligation to reduce the port dues covered by this compromise agreement, except in the event that the CPI decreases by more than 6% compared to the previous calendar year, in which case the Port of Tallinn will reduce the port dues covered by this compromise agreement by at least 2% annually and additionally by those percentage points where the CPI decrease is greater than 6%.
As an exception to the above, the Port of Tallinn has the right to change mooring charges and waste fees, if the cost of providing these services changes beyond the control of Port of Tallinn, in which case the difference between the original charge and the new charge will be taken into account proportionally.
The changed fees and charges will be applied from the next month after the compromise takes effect and the agreement applies for 10 years following the date from which the court order confirming the compromise is effective from.
„As a responsible and strategic company in maritime business, the Port of Tallinn contributes to the recovery of the international passenger transport sector and to the tourism sector in wider respect from the significant deterioration that has resulted from the COVID-19 pandemic, in order to secure the sustainability and survival of these sectors and in order to enable free movement of people and goods between Estonia and other countries around the Baltic Sea. It is also important to us that we have reached this agreement with one of our largest clients and we can look towards the future together,“ Valdo Kalm, CEO of the Port of Tallinn commented on the agreement.
„We are pleased that we have reached a compromise with our good long-term cooperation partners on the long-debated issue of port fees, that is suitable for both parties and which will change the pricing of port visits for passenger ferry operators using the services of the Old City Harbour. I would like to thank the Port of Tallinn for a constructive negotiation process and for the continuous effort to seek solutions suitable for both sides over the last few months“, Paavo Nõgene, CEO of Tallink Grupp said.
The exact economic impact of the compromise reached is difficult to assess due to the ongoing pandemic.
The compromise has not taken effect yet and it will be confirmed by the court with a court order. Once the court confirms the compromise, it will also terminate the court proceedings of this case.
The details of the dispute between the two parties were described in the stock exchange releases issued by Tallink Grupp on 1 March 2021, and by the Port of Tallinn on 1 March 2021, 15 April 2021, and 23 December 2021.
