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The controversy to purchasing artillery shells for Ukraine has increased the political turmoil in the government of Estonia. The country’s Defense Minister Hanno Pevkur has resigned from his post regarding the matter. The controversy pertains to a deal worth about 70 million euros, or about Rs 781 crore, in which advance payments were made to the companies. According to local reports, the companies concerned had no established record of manufacturing or supplying artillery shells in the past. Reports also mention an Indian company being linked to the deal. However, a legal dispute continues between the companies and Estonian authorities over the matter.

70 million euro deal raised controversy

According to reports, the Estonian Defense Investment Center had signed several contracts to purchase large-caliber artillery shells for Ukraine in 2024. Under these contracts, an amount of about 70 million euros was given as advance payment from the European Union’s European Peace Facility. These contracts are said to be to Datacel SRL, a company registered in Italy. Local reports claimed that the company was acquired by Indian company Neco Defense Munitions.

Supplies of fixed standards did not arrive on time

It is reported that the first contract was signed in August 2024. Thereafter advance payments were made in several instalments. According to the initial plan, the first batch of artillery shells was to reach Ukraine by November 2024. However, sufficient material could not be made available as per the prescribed quality in the stipulated time frame. According to Estonian authorities, the material received later also either did not meet the prescribed quality or was incomplete. For this reason, the matter of sending these shells to the Ukrainian front was not revealed.

estonia tried to cancel the contract

As the dispute over supplies escalated, Estonia tried to terminate the contract and take back the advance amount given. The matter is now said to be under consideration in the domestic court as well as in the European Arbitration System based in Strasbourg. A separate claim has been made by the company side. The company says that it had provided a large quantity of material and it suffered financial loss due to the sudden termination of the contract by the Estonian side. Thus, at present the dispute between the claims of both the parties is in the legal process and the final situation will be clear only after the decision of the court and the arbitration process.

After resignation, Pevkur expressed political responsibility

Hanno Pevkur was the Defense Minister of Estonia from 2022. Announcing his resignation, he said that a minister is not directly involved in the technical details of every defense procurement agreement. However, he also acknowledged that political responsibility for activities in the defense sector rests at the level of the minister. He said that the decision to support Ukraine is taken at the political level, while the responsibility of selecting the contractor and preparing the contract rests with the concerned procurement agency.

Questions raised earlier also on defense procurement system

Amidst this controversy, the report of the National Audit Office of Estonia is also in discussion. The report released last month criticized the country’s defense spending, military investment and arrangements to the procurement process. Questions were also raised in the report regarding the activities of the armed forces and the Defense Investment Centre. In this background, the controversy to ammunition procurement for Ukraine has further intensified the debate on the accountability of the Defense Ministry.

Indian company’s involvement also discussed

Indian connection has also come to light in this entire matter. Local reports claimed that the Italian company to which the contracts were linked was acquired by Indian company Neco Defense Munitions. However, the final conclusion regarding the allegations to this deal and the quality of supplies will come only after the completion of the legal process. At present, this matter remains a subject of serious debate in Estonia regarding the defense procurement system and political accountability.