A company may face a damages claim from a contractual partner that it does not accept, while non-payment could expose it to contractual remedies. Does paying prevent the company from challenging the claim later?
In its judgment of 5 August 2026 in civil case 2-23-5567/31, the Supreme Court of Estonia explained that, in the circumstances described, paying a disputed damages claim does not in itself change the allocation of the burden of proof.
Background to the dispute
Compensation for significant damage caused by game animals was claimed under an agreement for the hunting use of state-owned land. The payer disputed the merits of the claim, paid to avoid contractual remedies and later sought repayment under the rules on unjust enrichment.
The Supreme Court's position
Where the payer already disputed the merits of the claim when making the payment and paid solely to avoid contractual remedies, payment alone does not transfer the burden of proving the requirements of the damages claim to the payer. In the situation described, the party that received the money must prove those requirements.
This does not mean that the payer can bring proceedings without substantiating its own claim and the circumstances of payment. As a general rule, each party must prove the facts on which its claims and objections are based.
The calculation of damages must be verifiable
In this case, the lower courts' judgments did not make it possible to follow how the amount of damages had been calculated or how all material objections had been addressed. A court must give reasons for its conclusions and analyse the evidence.
The Supreme Court set aside the judgments of the county court and the circuit court and remitted the case to the county court for a fresh hearing. It did not order repayment of the money in this judgment.
Can every amount paid be recovered?
No. Under Estonian law, something transferred in performance of an obligation may be reclaimed if the obligation did not exist, never arose or subsequently ceased to exist. Mere disagreement is not enough.
Relevant factors include the objections raised at the time of payment, any acknowledgment of debt or settlement, and statutory restrictions. For example, a payment made to satisfy a claim that was already time-barred generally cannot be reclaimed.
The judgment's conclusion cannot automatically be extended to ordinary claims for fees or contractual penalties. A reduction of a contractual penalty cannot be sought after it has been paid; this is a separate question from whether the obligation to pay the penalty existed at all.
What should a business do?
- Dispute an unfounded damages claim in writing before payment or, at the latest, when making it.
- Record that you are paying solely to avoid contractual remedies, where that is the case, and that the dispute over the merits of the claim continues.
- Check that payment does not involve an unwanted acknowledgment of debt, settlement or waiver of objections.
- Keep the contract, demand letters, calculations of damages, correspondence and payment records.
- Assess the legal basis and limitation period for a repayment claim.
In the circumstances described, paying a disputed damages claim does not automatically change the allocation of the burden of proof. Documenting your objections and the reason for payment matters, but does not guarantee recovery.
Magilex can help assess the basis of the claim and the prospects of recovering the payment.
