Estonia paid €70 million for shells from untested supplier
Wednesday 2nd September 2026 on 06:30 in
Estonia
Estonia paid €70 million in advance for artillery shells intended for Ukraine to an Indian-backed company that had never sold any shells, Eesti Ekspress reported. The deliveries did not arrive, and the dispute is now headed to court.
The State Defence Investment Centre, Estonia’s defence procurement agency, sought to buy the shells from Datasel S.R.L., an Italy-registered company that Eesti Ekspress described as essentially a front. The company had no previous record of selling shells and was linked to members of an Indian business family.
In August 2024, the centre signed its first sales contract with Datasel and transferred an initial €15 million. The money came from the European Peace Facility rather than Estonia’s state budget.
State Defence Investment Centre Director General Elmar Vaher said he would not have signed the contract, adding that the decision was made by a very small group and that the centre’s procurement chief at the time was unaware of it.
The centre’s then-director, Magnus-Valdemar Saar, disputed that account. He acknowledged that buying ammunition from third countries involved risks but said no major decisions had been made without the approval of ministry leaders.
During negotiations on the first contract, Defence Minister Hanno Pevkur and then-ministry Secretary General Kusti Salm were informed. Kaimo Kuusk, who later became secretary general, was subsequently included in the information circle.
The centre signed a second contract with Datasel in October 2024 and again transferred an advance payment of more than €10 million. The first shipment was due to reach Ukraine in November, but Datasel then reported problems.
Despite this, two more contracts were signed at the end of 2024, bringing the total advance payments to about €70 million.
After the promised shells failed to arrive, Estonia turned to the courts. The main proceedings will take place before a European arbitration court in Strasbourg, according to Eesti Ekspress.