Estonia’s State Defense Investment Centre (RKIK) has rejected arms supplier Datasel’s proposal to establish a joint working group to resolve their dispute, ERR reports.

Datasel, an Italian company acquired by Indian-owned Neco Defense Munitions in 2024, had signed four contracts with RKIK to supply artillery ammunition for Ukraine using European Peace Facility funding.

RKIK terminated the contracts and pursued legal action following disputes over delayed and allegedly substandard deliveries, while noting that the financing period for the contracts has now expired.

Datasel said this week that it remains ready to complete the deliveries and has the resources and supply chain needed to fulfil its contractual obligations.

The controversy over advance payments of up to €70 million for ammunition that was not delivered contributed to Hanno Pevkur’s resignation as Estonia’s defense minister, according to ERR.

Read more: ERR.EE