News

4/26/2017

City Service received unfounded lawsuit

On April 21 City Service SE received a notice from Vilnius County Court that Vilnius City municipality’s administration and General Procurator‘s office submitted a lawsuit against the Company on recovery of losses. The lawsuit brings unfounded allegations that Vilnius City municipality might have suffered losses arising from public procurement agreements concluded in years 2002 and 2010 between Vilnius City municipality and the Company. The quantum of the lawsuit is EUR 20.6 million.

The Company reminds, that in 2014 Vilnius city municipality announced that thanks to ESCO model, implemented in cooperation with City Service SE, Vilnius city benefited significant savings through the period of 2002-2013, as high as EUR 36.2 million.

The Company is absolutely confident and ready to prove that the lawsuit is totally without merit. City Service SE reminds, that these public procurement agreements were investigated by Lithuanian courts before. In 2013, Supreme Court of Lithuania ruled in favor of ESCO model in above-mentioned agreements between City Service SE and Vilnius city municipality. Both public procurement agreements and ESCO model itself were declared as absolutely compliant with the laws.

City Service SE also remarks that the term to file such kind of lawsuit to the court has expired long ago. The Company has to submit respond to a lawsuit within 30 days, all legal arguments and objections to the lawsuit will be provided in Company’s response.

Since 2002, the Company under above mentioned public procurement agreements has been providing heating facilities management and technical maintenance services under ESCO model to education institutions established by Vilnius City municipality. ESCO model allowed to enhance energy efficiency and guaranteed substantial savings from energy expenses in public establishments. According to these agreements, City Service SE committed to maintain temperature levels in public establishments above occupational exposure standards, to reduce costs of system maintenance, and to make investments on behalf of the Company to achieve above-mentioned commitments.