Estonia, Markets and Companies, Medicine, Retail

Terve Pere Apteek may appeal the decision within 15 days.

The court decided on Monday that Terve Pere Apteek OU must immediately vacate the premises occupied on the first floor of the PERH complex in the Mustamae district of Tallinn, pay PERH a compensation of 711,099.70 euros for the period from Oct. 2, 2017 to May 13, 2019. The court also found that Terve Pere Apteek OU should pay 1,207.30 euros a day starting May 14, 2019 until the premises are vacated and pay a fine of 1,207.30 euros for every day since Oct. 2, 2017, from when the lease is no longer valid.

The court did not accede to an application by Terve Pere Apteek OU for avoiding the immediate fulfillment of the order. In addition, Apotheka's owner applied for the petition to be left unreviewed, which the court also did not accede to.

Terve Pere Apteek may appeal the decision to the Tallinn Circuit Court within 15 days from the service of the court order.

It appears from the court ruling of Harju County Court that, according to PERH, Terve Pere Apteek has been engaged in deliberate delaying with the aim of declaring the bankruptcy of Terve Pere Apteek before the final verdict in the civil case enters into force. Namely, it appears from the annual report of the pharmacy operator that while the company has a notable revenue, it is operating with great loss, which indicates the company's insolvency. This is why PERH is convinced that Terve Pere Apteek will soon cease its economic activity.

Among other things, it appears that the sole owner of Terve Pere Apteek, AS Magnum, has not made any additional voluntary contribution to the equity of Terve Pere Apteek in the financial year 2017, although the ratio of the company's net assets and share capital no longer complies with the requirements of the Commercial Code. In addition, Terve Pere Apteek has not set a mortgage on the property owned by Axis UPI on the basis of prior rulings of the Harju County Court for the revocation of the attachments, which, according to PERH, fits into the company's plans of bankruptcy as, in the event of a bankruptcy, the attachments would end but the mortgage to be set would not.

In order to secure the action, the court on May 13 seized the bank accounts of Terve Pere Apteek in the sum of 707,477 euros.

Terve Pere Apteek, operator of pharmacies under the Apotheka brand, has been running a pharmacy at PERH for years. Last summer, as the pharmacy's rent agreement was about to expire, the hospital staged a competition for the contract to operate the pharmacy, which was won by Benu Apteek Eesti OU.

When the rent agreement expired in October 2017, Terve Pere Apteek refused to vacate the premises citing shortcomings in the conduct of the competition and a valid accord concerning rent with PERH. The medical center on Oct. 4 filed an action against Terve Pere Apteek with the Harju County Court, demanding that the premises be vacated.

Kadri Ulla, member of the management board of Terve Pere Apteek, said that they have already appealed the compulsory enforcement ruling and will wait for a court ruling.

"Although we respect the court order, we remain convinced that oral agreements are also agreements. Accordingly, we hope that the second tier court will make a different decision than the first tier," Ulla said.

Ulla said that the stance of the county court is incomprehensible. "Terve Pere Apteek offered a guarantee into the court deposit, which would have covered all losses of the opposite party. Immediate compulsory enforcement is a very unusual measure in Estonian court practice. This essentially overrides the logic of the functioning of the entire court system in which a multi-tier court system is doing its work. As for the talk of the opposite party as though Terve Pere Apteek is nearing bankruptcy, this is definitely not true," she said.