Fairway dues have been a much-discussed issue in Finland for years. The controversy began in 2000 when the Finnish authorities began suspecting that ships which regularly entered and departed Finnish waters did not fully comply with the technical requirements for vessels of the relevant ice class. The authorities subsequently began collecting fairway dues retroactively (retrospective charges). This led shipping companies and their agents to file hundreds of appeals in the administrative courts.

In 2008, during these administrative proceedings, the Helsinki Administrative Court issued three important decisions confirming that until the Fairway Dues Act was amended in 2006, these retroactive charges were discriminatory and against EU principles on free movement of (maritime) services. The reason was that under the act, fairways dues levied from foreign transportation had been unjustifiably higher than those levied from domestic transportation.

Meanwhile, the European Commission issued a notification against Finland regarding the discriminatory rules on fairway dues, and in 2004 the commission commenced an action against Finland before the European Court of Justice (ECJ) for failure to fulfil EU law obligations. According to the commission, Finland had collected fairway dues for international transportation which were too high in comparison with dues paid for domestic transportation and, as such, were discriminatory. However, this action was dropped in 2006 when Finland amended the Fairway Dues Act in accordance with the principles set forth by the commission.

The general view at the time was that the Finnish state was obliged to return the fairway dues which had been collected contrary to EU law. In late 2008 Finnish Customs – which collects fairway dues – stated that it would refund any excessively levied fairway dues for 2005. However, many shipping companies argued that fairway dues collected from as far back as early 2001, or even earlier, should also be refunded. The problem lay with the fact that applications for the rectification of fairway dues must be filed within three years. Once the deadline has passed, fairway dues decisions can be altered only through a reversal by the Supreme Administrative Court. Application for reversal is an extraordinary remedy and its approval must always be based on the overall consideration of the Supreme Administrative Court.

In this case, the shipping companies had not applied for rectification before the three-year deadline had passed and consequently, by the end of 2008, 316 applications for reversal had been filed with the Supreme Administrative Court. On December 7 2009 the court dismissed all the applications for extraordinary reversal and rendered one precedent (KHO:2009:99) according to which the other applications were decided. The court found that the fairway dues decisions were in breach of community law. However, in the overall consideration for the rejection, the court stated that the applicants had not used the ordinary appeal procedures to reverse the fairway dues, even though the discriminatory nature of the dues was known at the relevant time. A second and surprising reasoning was that the applicants had transferred the fairway dues to their customers in their prices. Subsequently, the court found that the fairway dues had not violated the rights or interests of applicants.

Helsinki District Court judgment

In December 2010, when administrative claims did not lead to the desired results, a group of shipowners took the case to general court proceedings by instigating claims for unjust enrichment or claims for damages with the Helsinki District Court. In practice, the claims were the same as those presented in the Supreme Administrative Court. However, from a strict legal viewpoint, the claims were based on the principle that if a member state fails to follow EU law it is liable for the damages caused to individuals.

As the claims against the member state were handled pursuant to national rules, the first barrier was the time limit. Pursuant to the Act on Limitation of Debt, tort claims will be time barred within three years of the date on which the injured party became, or should have become, aware of the damage and the party became liable for it. The same time limit was applicable to unjust enrichment claims. As expected, the Finnish state argued that the claim had been time barred a number of years previously, but the Helsinki District Court dismissed the plea on June 28 2012.

On February 27 2015 the Helsinki District Court ruled in favour of the claimants and ordered the Finnish state to compensate the claimants more than €90 million. The court found that the state had breached EU law, as fairway dues legislation had been discriminative.

Helsinki Appeal Court judgment

The Helsinki Appeal Court overruled the district court judgment on August 8 2016 and found that the claims were time barred.

Regarding the time barring of claims, the question of when the three-year limitation period had started to run was placed before the appeal court. As the Finnish state argued that particularly unjustified enrichment claims were nothing but a variant of the administrative refunding claims, the appeal court had first to consider whether, as a general court, it had jurisdiction over the matter. The fact was that due to res judicata, administrative litigation was no longer available because the fairway dues decisions had never been subject to ordinary administrative appeals and, moreover, in 2009 the Supreme Administrative Court had dismissed applications for extraordinary reversal. However, unlike the Supreme Court, the appeal court accepted its jurisdiction over the unjustified enrichment claims.

The Finnish state argued, this time successfully, that an infringement procedure initiated by the commission against Finland in December 2004 was the latest moment when the claimants became aware of the possibility to claim damages from the Finnish state. Hence, the limitation period began to run in December 2004. The appeal court rejected the claimants' arguments that they had become aware of the infringement at the end of 2008 when the Helsinki Administrative Court decisions became final.

Having considered the legislature's statements and the recent Supreme Court judgments, the appeal court stated that it was not solely when the claimants, or each claimant individually, de facto became aware of the possible EU law infringement, but when they, considering their position as professional shipowners, should have understood this and thereafter the possibility to claim damages. The appeal court pointed out that the injured party must be active in claiming damages. Further, the court also pointed out that in the Supreme Court judgment (2016:28) it was stated that in cases where the legal basis of the claim is unclear, a careful creditor can usually interrupt the limitation period simply by sending a reminder of the debt to the debtor.

According to the appeal court, the relevant period began when the infringement became public knowledge after the commission issued press releases on November 11 2003 and December 16 2004. However, this was not when the limitation period started to run, but was instead the moment when on December 16 2004 the commission informed the public of its decision to refer the case to the ECJ. Hence, according to the appeal court, the claims became time barred on December 16 2007. As there was no claim that the limitation period had been interrupted before then, the claims were time barred.

Supreme Court precedent

The Supreme Court first granted one of the shipowners leave to appeal on the question of whether the claims were time barred. In the precedent rendered on December 8 2017, the Supreme Court accepted the appeal court judgment that the claims for damages were time barred (KKO:2017:84). Unlike the appeal court, the Supreme Court dismissed its jurisdiction over unjustified enrichment claims as alternative grounds for refunding the fairway dues between 2001 and 2004.

The Supreme Court found that the limitation period had started to run as early as when each single fairway dues decision made between 2001 and 2004 had become known to the claimant. Even though this finding was surprising, the reasoning was logical. The key finding was that it had been observable all the time that there had been a difference between foreign and domestic fairways dues. Therefore, the claimants had been able to observe that a basis for the difference might conflict with EU law, even though it had been more difficult to understand whether there was any justification for this difference. However, according to the court, it is always a starting point that even when the law as regards to liability is unclear there is a duty and possibility to interrupt the limitation period. In fact, the law has been unclear many times in the sense that a party causing damage disputes its liability until there a final court resolution has been reached. Although the Finnish state argued that the Fairway Dues Act was not discriminatory, there was no such legal praxis, as in Case KKO:2016:28, that the claimants could have relied on to indicate that the act did not conflict with EU law. Finally, the Supreme Court found that in ECJ praxis, a three-year limitation period is considered to be in accordance with the EU law principles of equivalence and effectiveness.

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For further information on this topic please contact Matti Komonen at HPP Attorneys Ltd by telephone (+358 9 474 2207) or email ( The HPP Attorneys Ltd website can be accessed at