Riga City Court opened civil proceedings in late September over a claim seeking to recover 1.5 million euros from Latvian media company AS Delfi. The lawsuit was filed by SIA Ekis & Co-Positioning and Consulting, the owner of news portal LA.LV, according to LA.LV.
The claim concerns an alleged failure to fulfil obligations under a cooperation agreement signed between the two companies in February 2024.
According to LA.LV, Delfi approached Ekis & Co-Positioning and Consulting in 2023 with a proposal to become the exclusive advertising sales provider for the LA.LV news portal.
However, LA.LV alleges that Delfi subsequently failed to meet the sales targets it had established under the agreement. The portal attributes this failure to what it describes as a lack of professionalism on Delfi’s part. Rather than addressing the situation, Delfi allegedly stopped fulfilling its contractual obligations by discontinuing the agreed payments.
LA.LV claims that Delfi has offered conflicting and, in some cases, mutually exclusive explanations for its failure to fulfil the agreement.
According to the portal, Delfi initially argued that the contract had caused it excessive financial losses. LA.LV disputes this argument, maintaining that such a claim is legally untenable because Delfi itself had determined the sales targets.
Delfi also allegedly argued that the cooperation agreement was entirely invalid.
LA.LV points out that Delfi raised this argument more than a year after the agreement was signed, at a time when the company allegedly began experiencing difficulties making the required payments. Despite the emerging legal dispute, Delfi continued selling advertising space on LA.LV and retaining the revenue generated from those sales, the portal claims.
“At one point, they simply stopped paying the invoices while continuing to place advertisements on LA.LV. It was a rather strange situation – the service was being used, but no money was being paid,” said LA.LV Chief Financial Officer Normunds Kalniņš.
LA.LV believes the underlying cause of the dispute is poor business management at Delfi.
According to the portal, Delfi was forced to borrow money from an affiliated company to avoid insolvency proceedings. LA.LV also alleges that Delfi went as far as proposing to use funds allocated under media support programmes and held in the State Treasury to fulfil its contractual obligations. The portal argues that such funding cannot legally be used to settle private contractual liabilities.
LA.LV stated that several circumstances suggested Delfi was not only unwilling to meet its obligations but potentially unable to do so. Consequently, the company decided to pursue the dispute through the courts. LA.LV expects lawsuit to set precedent for Latvian media market LA.LV believes the proceedings should be public and could establish a lasting precedent in Latvia’s media industry.
The portal has announced that it will continue informing the public and other media market participants about developments in the court case. The allegations presented in the report are those of LA.LV. The article does not include Delfi’s response to the claims, and the court has not yet ruled on the dispute.