State defence centre terminates seven Ukraine arms contracts

Estonia’s State Defence Investment Centre has terminated seven of 27 contracts to buy weapons or ammunition for Ukraine, with legal action already under way in five cases, ERR reported.

The contracts are worth approximately 350 million euros in total. The centre’s director general, Elmar Vaher, initially said on Friday that 28 contracts had been signed and eight had become problematic. The centre later said an error in its tables, caused by human error, meant the correct figures were 27 contracts and seven terminations.

“In these cases, it can be said that things did not go as we wanted, so that the goods would reach Ukraine,” Vaher said on the television programme Terevisioon.

The centre has taken four contracts with one company to international arbitration. It has also brought a jointly concluded contract involving two companies before Harju County Court. Those five contracts are worth a combined 59.8 million euros.

The centre has terminated two additional contracts with two companies and is preparing documents to take those cases to court. The two contracts are worth a total of 11.8 million euros.

Vaher said the deadlines and delivery schedules set for procurements using European Union funds had passed. He said the main reason for terminating the contracts was that the goods shown to the centre and examined by its experts were not what Ukraine wanted to help win the war.

Estonia has also recently been reported to have paid 70 million euros for shells intended for Ukraine that it has not received. Poor-quality production may make the shells dangerous to use or prevent them from fulfilling their intended purpose.

Vaher said it had not been a wise decision to sign contracts and make advance payments to a shelf company whose purpose was simply to operate in the European Union and act as an intermediary. When he took office, he said, the contracts had already progressed to a point where the centre could do little except protect its rights.

“The negotiations must be concluded with dignity and courtesy, but to protect our rights, we must go to court,” Vaher said. He added that the centre had begun legal proceedings in March or April.

Many employees who signed the contracts have since left the State Defence Investment Centre, as has its previous director general, Magnus-Valdemar Saar.