Damages reduced in Lemminkäinen cartel case
By Sandy Guthrie20 October 2016
Operating profit at Finnish contractor Lemminkäinen will improve as a result of a Helsinki Court of Appeal ruling over asphalt cartel damages, which has reduced the amount to be paid.
The company said it would receive reimbursement of approximately €14 million in capital. Lemminkäinen will record the reimbursement as income in its fourth quarter results.
In the spring of 2014, Lemminkäinen said it would appeal against a fine levied against it the previous November, having been found guilty of acting as part of an asphalt cartel.
Initially, it had been ordered to pay €48 million in damages, interest and legal expenses. It paid the damages in January 2014.
This week, the Helsinki Court of Appeal ruled that of the 25 claims where Lemminkäinen was the only defendant, it should pay 18 claimants damages of approximately €6 million in capital, which Lemminkäinen pointed out was in the region of €9 million less than the District Court had ordered.
Lemminkäinen said that for 12 other claims where Lemminkäinen and other asphalt industry companies were defendants, the Court of Appeal ordered the defendants to pay eight claimants damages approximately €14 million in capital, which was about €5 million less than the District Court had ordered.
In these claims, Lemminkäinen said its liability to pay was “partly joint and several together with other defendants”.
In November 2013, six other defendants were ordered to pay damages – VLT Trading, NCC Roads, Skanska Asfaltti, SA-Capital, Rudus Asfaltti and Super Asfaltti – up to the low single digit millions.
At that time, Lemminkäinen’s was the largest share, split into damages of €26 million, and interest and legal expenses of approximately €22 million.
Lemminkäinen said that contrary to the earlier decisions of the District Court, the claims of the State of Finland and one municipality were now “partly accepted”, and that these decisions were included in the figures above.
The defendants have been ordered to pay interest and legal expenses of approximately €3 to €7 million less than the District Court had ordered. Lemminkäinen’s liability to pay is partly joint and several together with other defendants.
Lemminkäinen said it would later specify the amount of the total reimbursement which it was entitled to receive – capital, interest and legal expenses – based on the decisions of the Court of Appeal.
Casimir Lindholm, president and CEO of Lemminkäinen, said, “We are satisfied with the decisions of the Court of Appeal to the extent our appeals were accepted. Our daily operations will continue as planned, focusing on step by step improving our operational result and competitiveness in all our operations.”
Lemminkäinen said it had deemed the claims for damages unfounded. It said it would carefully study the decisions of the Court of Appeal then decide whether there were grounds for requesting leave of appeal from the Supreme Court. Lemminkäinen said it had 60 days to make such a request to the Supreme Court, and would announce its decision once it had been made.
Lemminkäinen said it had appealed to the Helsinki Court of Appeal against all 35 decisions in which the plaintiffs’ claims were partly accepted. In Lemminkäinen's opinion, there were some judicial aspects in the decisions of the District Court, where the conclusions of the District Court differed from previous legal practice.
It said such judicial aspects were related, among other things, to questions regarding limitation periods and value added tax.
The Finnish state and 22 municipalities also lodged their appeals to the Helsinki Court of Appeal.
In addition to the claims now ruled on by the Court of Appeal, 21 claims for damages are pending before the District Court of Helsinki. The capital amount of these claims is approximately €26 million.