Datasel, an Italian company acquired in 2024 by Indian-owned Neco Defense Munitions, signed four contracts with RKIK to supply artillery ammunition for Ukraine using EU European Peace Facility (EPF) funding. However, disputes over delayed, substandard deliveries led the RKIK to terminate and pursue legal action.

Revelations Estonia had paid up to €70 million in advance for artillery shells for Ukraine that were never delivered led to the resignation of Hanno Pevkur as defense minister.

Datasel this week sent a letter to the government, members of the Riigikogu and the RKIK proposing a joint working group to resolve disagreements and confirming its readiness to complete deliveries. The company said it has the resources and supply chain to fulfill its contractual obligations.

"It is not too late to resolve the disagreements," lawyer Veiko Viisileht, acting for Datasel, told "Aktuaalne kaamera". "Datasel is ready to sit down with the RKIK at the same table and resolve all disagreements."

RKIK gave a blunt response, however, with its lawyer Maria Pihlak noting the contracts had been financed through the European Peace Facility, but the period for using that funding has now ended.

"Simply put, this means that the RKIK does not have the budgetary resources today to accept the remaining ammunition that has allegedly been produced or is being produced in the future," Pihlak said. "Negotiations like these will not lead anywhere, anymore. We have an ongoing lawsuit, we have an ongoing arbitration dispute, and we will continue to defend our rights in these proceedings."

The two sides also disagree over the termination of the contracts. "These contracts were terminated because they repeatedly violated deadlines," Pihlak noted. Viisileht countered that whether the contracts were validly terminated "is a contentious issue both in court and in arbitration."

SDE MP Raimond Kaljulaid, a member of the Riigikogu National Defence Committee, said Datasel's latest appeal had not served to boost the company's credibility either, pointing to the European Public Prosecutor's Office (EPPO) investigation into the use of EPF funds by Estonia.

"What has changed is that news has come that this company is also being investigated very seriously at the European level," Kaljulaid said. "My first reaction was that maybe this has given them some idea that whatever it takes, let's try to fulfill our contractual obligations now so that we can somehow get this issue off the ground."

Datasel is being represented on the Estonian side by law firm LINKLaw and the PR company Powerhouse.

In 2024, the RKIK signed four contracts with Datasel, an Italian firm acquired by Indian-owned Neco Defense Munitions, paying roughly €70 million up front. Deliveries were however reported as being delayed or substandard, leading RKIK to terminate and pursue legal action. Datasel denies any wrongdoing.

The National Audit Office (Riigikontroll) had flagged the same inventory problems a year earlier, and the Ministry of Defense promised to fix them, but it did not. The same audit also found €59.8 million in prepayments to Datasel for munitions for Ukraine, none of which actually arrived in Ukraine. The EPPO is investigating that.

Hanno Pevkur (Reform) resigned as defense minister on September 2, taking political but not personal responsibility for the saga. His replacement has been named as Martin Herem, former Estonian Defense Forces commander and a retired general.

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