Question
The overall data of purchase and usage of electric vehicles in Latvia has been below the EU average. To fulfill the EU sustainable energy requirements
The overall data of purchase and usage of electric vehicles in Latvia has been below the EU average. To fulfill the EU sustainable energy requirements and promote the switching to electric vehicles, the government has come up with a support plan of permitted state aid in a form of tax reduction to every enterprise that purchases electric vehicles for its company fleet. I-drive is a car dealership in Latvia representing I-drive car brand that has approximately 12% market share of all electric cars distributed worldwide. It has been present in Latvia for some time already and is ready for the support plan with a discounted offer to the potential clients. I-deal is looking at the largest entities operating in the country looking to renew the whole fleet usually consisting of around 500 cars with an approximate purchase value of EUR 35 000 per vehicle, excluding the VAT. In the draft purchase agreement for the vehicles, I-drive has proposed the following clause for dispute resolution: All disputes, differences or claims arising out of or in connection with the present agreement, which concerns it or an infringement of it, termination or invalidity, shall be finally settled at the Baltic International Arbitration Court (7 Gertrudes Str., Riga, LV-1010) in accordance with its Arbitration Rules. The number of arbitrators is 1 (one). The language of arbitration is English; The place of arbitration is Riga. The applicable laws are Latvian. Eletric energy is one of the first companies wishing to renew its fleet and has announced a tender for 500 electric cars. The rules of the tender require I-drive to sign a statement that the bid has been submitted independently and, in case the opposite turns out, Electric energy is entitled to terminate the agreement. I-drive applies to the tender and submits its bid. When reviewing the tenders, the lawyers of Electric energy notice that the tender of I-drive is almost the same in terms of price as the tender of its largest competitor. However, due to the rush in being the first company to renew its fleet, Electric energy chooses I-drive and enter into purchase agreement for the cars. A year later it becomes public knowledge that the local competition authority has started an investigation into the question whether I-drive and its competitor aligned for the prices in the tender for Electric energy and other tenders. Two years later, the local competition authority fines I-drive and its competitors for agreeing on prices to be submitted in the Electric energy tender and in other tenders and hold them accountable of breach of Article 101 of the EU Treaty. I-deal argues that the decision is wrong since the prices were set independently and are publicly available in principle, so intelligent competitors would inevitably come up with very similar offer price of one vehicle. I-deal appeals the decision of the authority to the Administrative Regional court, arguing that the local authority has failed to apply Article 101 correctly. The court has initiated the proceedings. At the same time, Electric energy has started an arbitration case against I-deal claiming that I-deals violation of Article 101 has led Electric energy to suffer damages in the amount of at least 10% from the total car purchase cost and claims compensation for such. I-deals lawyers are not sure if the Administrative Regional court will know how to apply Article 101 of the EU Treaty correctly. In addition, they are worried about the arbitration decision coming into force before the administrative case ends. Please advise of the potential course of action.
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