The Finnish Supreme Court ruled in environmental liability claim in our client’s favor

Merilampi represented Nokia Corporation in a claim concerning a sale of real estate and liability for damages against the City of Kerava. The Supreme Court rendered its decision on 15 February 2018 (KKO 2018:11), entitled Statute of Limitations on Debt—Interruption of the Limitation Period – Damages – Sale of Real Estate – Notice of Defect.

Nokia Asset Management Oy sold a real estate to the city of Kerava in 2003. Kerava sold the real estate to a third party in 2009. During construction work after the sale, rubber material was found on the property.

Kerava submitted a claim for damages concerning environmental clean-up costs to Nokia Asset Management Oy in 2011 and Nokia Corporation in 2012. Kerava claimed, firstly, damages for the clean-up costs from Nokia Corporation and, secondly, that Nokia Asset Management Oy was liable to compensate the damages based on the Code of Real Estate. Nokia Asset Management Oy was merged into Nokia Corporation during the proceedings.

The Supreme Court ruled unanimously in favor of Nokia Corporation, stating that Nokia Corporation was not liable for the real estate’s remediation costs paid by the city.

Kerava’s claim for damages was rejected due to the statute of limitation. Its claim was presented to Nokia Corporation later than three years after the discovery of damage. The Court ruled that the statute of limitation began to run when a city representative was present at the inspection of the real estate and received adequate information of the damage.

Kerava also argued that the notice of defect presented to Nokia Asset Management Oy in 2011 extended also to cover Nokia Asset Management Oy’s parent company, Nokia Corporation. On this matter, the Supreme Court held that notice of defect presented to the subsidiary company did not interrupt the limitation period of the parent company.

Regarding the city’s secondary claim, the Supreme Court ruled that Nokia Asset Management Oy’s actions were not in bad faith or grossly negligent and therefore Nokia Asset Management Oy was not liable for the claimed damages according to the Code of Real Estate. The Supreme Court held that Nokia Asset Management Oy had duly carried out the appropriate investigation of the property’s condition with an independent specialist before selling the real estate to the city.