ESTONIA Law and Practice Contributed by: Maria Pihlak, Carri Ginter, Raul Kartsep and Katariina Kuum, Sorainen
a remedy might be contrary to public policy and thus unenforceable. 8.2 Methodologies for Quantum Assessment Standard valuation methodologies are common in Estonia, namely, discounted cash flow, market value and loss of profits; sometimes cost‑based approach- es are used depending on the treaty, the sector, and the nature of the investment. 8.3 Recovering Interest and Legal Costs Parties are entitled to recover interest as well as legal and expert fees and arbitral institution costs. Under Estonian law, unless otherwise agreed by the parties, the arbitral tribunal, in its decision, rules on the alloca- tion, between the parties, of the costs of arbitration proceedings and of the necessary costs incurred by the parties as a result of attending the proceedings. Where the amount of the costs has not been deter- mined or cannot be determined before the end of arbitration proceedings, the costs are dealt with in a separate decision of the arbitral tribunal. A ‘costs follow the event’ approach is commonly adopted, though the exact allocation depends on the treaty, the specific tribunal, the rules, and the conduct of the parties. 8.4 Mitigation of Damages There is a general expectation that investors should mitigate losses. Estonia enforces foreign arbitral awards under its domestic law (Code of Civil Procedure) and obliga- tions under treaties/conventions (eg, New York Con- vention and ICSID Convention). While ICSID awards are enforceable as though they were final and enforceable decisions of national courts of Estonia, to enforce other ISDS awards, one often must apply to an Estonian court to recognise an award under the New York Convention. Courts check whether grounds for refusal apply (eg, invalid arbi- tration agreement, lack of due notice, scope beyond 9. Enforcement of Awards 9.1 Enforcement Procedure
submission, composition of tribunal, subject matter non‑arbitrable, public policy). If an award has been set aside by the courts at the seat of arbitration, Estonian courts may refuse enforce- ment. Additionally, if there are ongoing annulment/set- aside proceedings, these may affect enforcement (but details depend on specific circumstances). As to sovereign immunity, Estonia is guided by inter- national law and practice. There is no case law of Estonian courts regarding the upholding of sovereign immunity to avoid the enforcement of an ISDS award. 9.2 Approach of the Courts Estonian courts are generally arbitration‑friendly, meaning they tend to enforce foreign arbitral awards unless strong grounds for refusal exist. The Supreme Court has made statements to this effect. Additionally, Estonian courts define public policy nar- rowly. For example, in case 2‑18‑4731, the Supreme Court held that not all mandatory provisions are public policy – only core values such as arbitrator independ- ence, non‑arbitrability, etc. 9.3 Asset Tracing and Recovery As is typical in small jurisdictions, enforcement depends on whether there are identifiable state or state‑entity assets in Estonia or elsewhere that can be attached. Estonian courts consistently recognise foreign arbi- tral awards and permit their enforcement through bailiffs. As holders of a public-law office, bailiffs pos- sess extensive powers to identify the debtor’s assets through state registers, enquiries to financial institu- tions, etc. There is no relevant case law or practice of Estonian courts regarding the piercing of the corporate veil.
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