Indian firm Datasel: Estonia's contract termination left it out of pocket
Ammunition supplier Datasel, based in India, says it had delivered most of its contracted goods and could have fulfilled all obligations had Estonia not terminated the deal. The dispute has already led to the resignation of Estonia's defense minister.
Indian company Datasel, at the center of an Estonian defense procurement scandal, says it had already delivered the bulk of the munitions it was contracted to supply and could have fully met its obligations had Estonia's Center for Defense Investments (RKIK) not terminated the agreement. The claim was relayed to Eesti Ekspress through the company's lawyer.
The scandal led to the resignation of Defense Minister Hanno Pevkur (Reform) on Wednesday evening, and the dispute over payments is now before international arbitration.
Datasel says it is the party that has suffered losses over the supply contracts, calling the RKIK's justification for the extraordinary termination "contradictory and illogical."
Unclear money trail
The company confirmed receiving €59 million in advance payments from the RKIK, while the agency had set the total procurement value at €70 million — meaning, according to Eesti Ekspress, that the remaining funds must be located "somewhere else," though the outlet says it does not yet know where.
Datasel said it had supplied a significant quantity of goods and submitted invoices totaling €58 million. It acknowledged delays in delivery but disputed allegations that the goods were of insufficient quality. The company said it was eventually given to understand that the RKIK was unable to accept the remaining goods, and maintains it is still willing to fulfill the contract if the agency meets its own obligations.
Background
Eesti Ekspress reported on Wednesday that Estonia had sought to buy artillery shells from Datasel as part of an effort to support Ukraine, but the deal collapsed. The RKIK terminated its contracts with Datasel last fall and demanded the return of advance payments. Datasel disputed the demand, prompting the RKIK to pursue the matter first in an Estonian domestic court and then before the Strasbourg-based European Court of Arbitration. There reportedly is no record confirming that shells were ever produced for Ukraine.
Pevkur, announcing his resignation, said he had no personal involvement in the case but was taking political responsibility. The affair has triggered cross-party calls for accountability and a criminal investigation, and has exposed weaknesses in the Estonian Defense Forces' inventory management system.
