Estonia refers dispute over shell contract for Ukraine to arbitration
Estonia has referred a dispute with Datasel S.R.L. over contracts for the supply of shells to Ukraine to the European Court of Arbitration in Strasbourg. The Estonian Centre for Defence Investments transferred advance payments to the company totaling around €70 million, but the ammunition was not delivered within the timeframes stipulated by the contracts.
This was reported by ERR News, citing Eesti Ekspress. According to the publication, in 2024 Estonia concluded an agreement for the supply of shells with Italy-registered Datasel S.R.L., which is owned by India’s Neco Defence Munitions. As ERR News notes, neither company had previously produced the required ammunition.
Advance payments
The advances were financed with funds from the EU’s European Peace Facility. In August 2024, the Estonian Centre for Defence Investments concluded its first contract with Datasel and transferred €15 million. In October, the parties signed a second agreement, after which the company received another €10 million in advance.
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The first batch of ammunition was planned to be delivered to Ukraine in November 2024, but Datasel reported delays and problems. Despite this, two more contracts were concluded at the end of 2024 and additional advance payments were made. Their total amount reached around €70 million.
Officials’ assessments
The current director general of the Estonian Centre for Defence Investments, Elmar Vaher, who took up the post this year, said he would not have signed such a contract. According to him, the decision was made by a very narrow circle, while the then head of the centre’s procurement unit claimed that he knew nothing about it.
The centre’s former director general, Magnus-Valdemar Saar, denied this claim. He acknowledged the risks of procuring ammunition in third countries, but said that no important decision was made without the approval of the ministry’s leadership.
