All Disputes Can Be Resolved

Conflicts are always costly and time consuming. Fortunately, business disputes are usually only about money and rarely cause human casualties.

Nobel Peace Prize winner President Martti Ahtisaari has famously said that all conflicts can be resolved. It is already 17 years ago that President Ahtisaari established Crisis Management Initiative (CMI), the Finnish organisation that works to prevent and resolve violent conflicts all over the world. At D&I, we are very proud to support the valuable work of CMI as its exclusive legal pro bono partner. Over the years CMI has grown to become one of the global leaders in its field.

I recently had the privilege to attend a seminar arranged by CMI together with the Elders, the group of independent leaders brought together by Nelson Mandela in 2007. The list of speakers and panelists was impressive with names like President Ahtisaari, former Secretary General of the UN Kofi Annan, former President of Ireland Mary Robinson, former Prime Minister of Norway Ms Gro Harlem Brundtland, former President of Mexico Ernesto Zedillo, former Education Minister of Mozambique Graca Machel, President Sauli Niinistö, MP and former Prime Minister Alexander Stubb and Sir Richard Branson.

One could imagine that resolving violent disputes would be a very technical exercise, but the speaches and panels at the seminar were dealing with very human aspects. It is as President Ahtisaari has emphasized always humans that cause conflicts, and it is therefore possible for humans to resolve them.

In my experience the human aspect is strongly present also in the conflicts we advise on in the business world. The root cause of disputes is almost without exception a human feeling, such as a feeling of unfairness or disappointment. At the same time we as lawyers tend to view the world from a legal technical perspective, setting aside the underlying human motives of the parties involved as "soft and irrelevant".

Yet resolving the disputes we encounter in business efficiently, requires us to consider the human emotions causing the dispute as "hard" facts. When seeking to resolve a dispute, the feeling of having been mistreated may be as relevant as the unambiguous wording of the relevant contract.

We lawyers are in the people business. People are not always as rational as they wish to appear. Both in negotiations and disputes it is important to understand the underlying interests and human emotions.

Let's admit that we are all humans with feelings and fears and let's communicate them more openly also in our professional lives. Let's show interest for the human emotions of our counterparts and take them into consideration, also in the way we communicate.

Disputes are all about being human and resolving disputes is all about understanding that!

Jan Ollila

Senior Partner, Head of M&A & Private Equity


Digital Disruption Creating Opportunities

"Understanding the impact of the changing world to our clients has always been at the core of who we are", says Managing Partner Anders Carlberg.

During the last couple of years there's been a strong increase in demand for D&I's strategic services relating to digitalization. Behind the increased demand are our clients, in particular every third Dow Jones Industrial Average company having significant operations in Finland and half of the 50 largest publicly listed companies in Finland. All of these clients lead their businesses in a digitalized world but their legal needs are almost never identical, Carlberg says.

"We have the leading digital disruption team in Finland."

The common denominator for today's clients is their need to capture opportunities of emerging business models and create baseline for future digital solutions within their industries. According to Carlberg, these are not routine tasks, but tasks that require the ability to perceive unstructured problems, create new ways of legal thinking, analyze critically various alternatives without unequivocal criteria for decision-making and, ultimately, the capacity to produce innovative solutions withstanding the test of time. When stakes are this high, it's a tall order for any legal advisor. "Not everyone can rise to the challenge. We, however, have the leading digital disruption team in Finland, winning Powerhouse operating model and highly satisfied clients", Carlberg says.

AI Ross, I Presume?

Executing digital transition in working methods and service experience is non-negotiable for any first-class law firm, D&I included. Just recently, Carlberg was interviewed for YLE Svenska on the future of legal services. Besides making the public promise of D&I being one of the first law firms in Finland to utilize AI-based software in due diligence reviews, he also predicted the legal market to divide even further.

"I'm on a mission to leverage our customer experience for competitive advantage."

Carlberg feels passionate about capturing added value in D&I's services through superior service design tied with digital innovation. "I'm on a mission to leverage our customer experience for competitive advantage", Carlberg says smiling. "It means discovering the right ways to lead D&I's team of 80 professionals through the digital transition, into a service mindset", he continues.

However, Carlberg emphasizes that for high-end advisory firms such as D&I focusing on the most demanding cases for the most demanding clients, the key is not in "becoming a technology company" but excellence in new ways of legal thinking and in human-to-human interaction. "That's the kind of excellence our clients value most at D&I".

Rethinking Legal Services

The key for developing and designing their digital services is the perceived customer value. "I strongly believe in customer co-creation of services for improved customer experience", Carlberg explains.

Just recently he invited clients who'd been attending D&I's Technology Revolution Roundtable -series to attend the first Legal Tech Conference organized by the Legal Tech Lab, University of Helsinki. D&I was the sole sponsor of the conference where D&I's partner Hanna-Mari Manninen acted as the moderator of the panel discussing the future of legal services.

"I'm a big supporter of bringing the academia and practical world closer to each other."

According to Carlberg, Legal Tech Lab's forward-looking mindset, topical research on blockchain, robotics and AI, as well as their network ideology are bound to have a positive impact on the future of our society. "Personally, I'm a big supporter of bringing the academia and practical world closer to each other. In an era of pervasive and ultrafast development, the way universities are raising our future lawyers must develop too."

Most Recently D&I Has:

  • Assisted Finnish Ministry of Transport and Communications by conducting a preliminary background research for the preparation of the Transport Code that aims to improve the Finnish transportation system and to pave the way for the development of the Mobility as a Service concept.
  • Advised one of the largest Finnish companies on the digitalization of its retail business.
  • Provided strategic advice in large-scale international data protection and data security compliance projects for large Finnish listed companies such as UPM Corporation, Uponor Corporation and Valmet Corporation.
  • Provided strategic advice in Intelligent Building and Smart Cities engagements for Tieto Corporation and SRV Corporation.
  • Advised PE house Ratos in the sale of Nebula to Telia. Nebula is a market leading provider of cloud services, managed services and network services to SME customers in Finland. The transaction is the largest PE deal so far this year in Finland and it involved topical legal questions related to cloud services, data protection, intellectual property and information technology.

Anders Carlberg

Managing Partner


Sustainability – Core Consideration in M&A

The Growing Imperative of Sustainability in M&A

Sustainability has been a hot topic in M&A during the recent years as more and more companies have begun to recognize the impact of sustainability factors to their operating environments. The reason behind the rise of sustainability is simple and perhaps a bit gritty; studies have found that companies that are focused on sustainability are more likely to better manage environmental, financial and reputational risks. This is likely to lead to a better valuation on the company over the long term.

"It is self-evident that the need to address sustainability issues in M&A is only becoming more important in the face of expanding government attention, low-carbon economy, growth of responsible investment, and greater media exposure of sustainability issues."

It is self-evident that the need to address sustainability issues in M&A is only becoming more important in the face of expanding government attention, low-carbon economy, growth of responsible investment, and greater media exposure of sustainability issues. This growing imperative of sustainability issues in M&A is forcing the buyers to gain a deeper understanding how the business models and strategies may be impacted in the long run and how to manage and mitigate the risks associated with them.

In M&A transactions, "ESG" - environmental, social and governance - is a commonly used interchangeable term for sustainability. As the term ESG well demonstrates, the spectrum of ESG issues is broad including e.g. pollution and contamination, treatment of employees, equality and diversity, human rights, anti-bribery, and corruption. These multifold ESG issues may have a significant effect on the viability and the ultimate value of a transaction. Because the amount of different possible ESG risks may sometimes feel paralyzing, the buyers need to be aware of the material ESG factors for the target's business operations and carefully determine how to approach them in the course of a deal. This assessment must be made in all transactions – gone are the days when buyers raised sustainability issues mainly in transactions related to the consumer sector.

What to Keep in Mind?

1 Generic Risk Assessment
ESG issues may not be easily identified and the examination of such issues might require a burdensome thorough analysis. Therefore, it is crucial that a buyer first identifies the generic risks that are relevant to the transaction on the basis of the target's geography, industry, and operations. Although certain industries, such as companies in consumer and energy sectors, are more prone to ESG risks, it is important to bear in mind that some ESG issues are universal. In fact, there might be even a greater need to ensure that ESG issues receive a systematic consideration in sectors where ESG risks have been seen as a less business critical in the past – even if only to be ruled out at a later phase.

2 Due Diligence
After the general risk assessment, the buyer should review the target company's capability to address and manage ESG risks by reviewing its codes of conduct, policies, processes, and consciousness of ESG issues. By comparing the generic risks to the target's risk management, a buyer is able to assess whether the target entails ESG risks or risen potential. In case the assessment reveals material ESG risks, the buyer should consider detailed due diligence and if necessary, consulting technical or local expertise.

3 Leverage in SPA Negotiations
Contractual protection against ESG risks can be very limited, if not non-existent. ESG risks are often dependable on the actions of the target's business partners and a seller may be reluctant to give any indemnities related to third parties. However, ESG factors can be put into the SPA as a price negotiation tactic. Although the seller is unlikely to accept such clauses, it can be used as a lever to negotiate the price or to get more detailed information on the possible ESG issues.

"When it comes to complex transactions with cross-border, capital markets, financing, tax and structuring elements, our proactive and integrated way of dealing with all aspects of a transaction distinguishes us from ordinary law firms.

We drive all relevant work streams (including tax & structuring, employment, competition and data protection), in one coherent, efficiently managed, process. This allows us to focus on inventive ways of tackling the particular opportunities and challenges of each individual transaction. We strongly believe that this way of working offers most value to our clients.

So, for us, looking at a transaction from a point of view of a specific area of law is mainly an academic question, because at D&I, we work seamlessly across legal areas and cross-practice, as a Powerhouse in transactions."

- Jan Ollila, Senior Partner

Jan Ollila

Senior Partner, Head of M&A & Private Equity

Toni Pöllänen

Associate, M&A & Private Equity and Finance & Capital Markets


State Aids in Taxation

The Commission has been investigating the tax ruling practices of Member States since 2013 and a number of fairly traditional international tax practices have been challenged by the Commission. As a consequence, the risks related to many established structures have manifestly increased, also since an unlawful state aid can be recovered with a compound interest for a ten-year period. This certainly marks international tax structures a board level issue.


The Commission set up a dedicated Task Force Tax Planning Practices in summer 2013 to follow up on public allegations of favorable tax treatment of certain multinational companies, in particular in the form of tax rulings, voiced in the media and by politicians.

The list of final decisions can be found on the Commissions website.

Unlawful State Aid

A preferential tax treatment can constitute unlawful state aid under Article 107 of the Treaty on the Functioning of the EU. The qualification of a measure as aid within the Article therefore requires the following cumulative conditions to be met:

(i) the measure must be imputable to the State and financed through State resources,

(ii) it must confer an advantage on its recipient,

(iii) that advantage must be selective, and

(iv) the measure must distort or threaten to distort competition and have potential to affect trade between the Member States.

The requirements (i), (ii) and (iv) can generally be met if the recipient operates its business in various Member States. The crucial question is what constitutes a preferential tax treatment that gives the recipient an advantage on a selective basis, for example to specific companies or industry sectors, or to companies located in specific regions. Thus far, the Commission has focused on favorable tax rulings provided by Member States to a specific company, but also widely available beneficial tax elements of a tax system may be targeted. Although the investigations have focused on large multinational groups, no monetary threshold has been defined.

Tax Practice as a Selective Measure

It can be argued that part of the Commission's decisions and open investigations relate to fairly ordinary tax practices of Member States regarding e.g. tax treaty interpretation or profit allocation.

For example, the structures adopted by Apple and McDonald's 1 have been based on established rules on international taxation on one hand, and the variety of domestic rules in different countries on the other. It could be argued that, in principle, these rules are applied without selectivity and that e.g. non-inclusion situations arising from different domestic tax systems should not be deemed selective. As Apple has stated in its defense, there are no selective elements if all non-resident taxpayers are treated in the same way (A summary of Apple's appeal can be found here).

New Arm's Length Principle under EU State Aid Rules

According to the Commission, EU state aid rules include the "arm's length principle" which is based on a general principle of equal treatment. It is noteworthy that the Commission specifically states that when examining a tax case under the State aid rules, the Commission applies Article 107(1) of the Treaty and the arm’s length principle, as interpreted by the Court of Justice.

The Commission does not directly apply Article 7(2) and/or Article 9 of the OECD Model Tax Convention or the guidance provided by the OECD on profit allocation or transfer pricing, which the Commission considers only to consist of non-binding guidance that do not deal directly with matters of state aid. Effectively, this results in the creation of a separate arm's length standard for state aid purposes. The Commission considers that any transfer pricing ruling that does not reflect the "reliable approximation of a market-based outcome" may constitute a selective advantage. For example, the Commission considers transfer pricing arrangements that adopt a one-sided approach (such as the transactional net margin method (TNMM)) particularly problematic.

It is clear that such interpretation extends the powers of the Commission in the area of international taxation giving rise to significant uncertainty in e.g. transfer pricing matters, as dealings that are "at arm's length" for transfer pricing purposes do not necessarily stand the arm's length test for state aid purposes.

Finnish Tax Practice

Also the Finnish tax system includes elements that could become under investigation by the Commission. Examples of such elements could include e.g. basically any advance rulings, the discretionary powers of the Tax Administration in granting exemption orders relating to tax losses, industry exemptions in the CFC rules, the non-applicability of interest limitation rules to certain industries, or the established practices involving deviations from the arm's length principle or the deemed dividend rules.

Remarkable Risks

The aid to be recovered pursuant to a recovery decision includes a compound interest and it is payable from the date on which the unlawful aid was at the disposal of the beneficiary until the date of its recovery. The limitation period for recovery is ten years. Therefore, risks related to unlawful state aids may often be higher than traditional tax risks.

"The creation of a separate "arm's length standard" for state aid and transfer pricing purposes may create significant uncertainty."

1 The Commission's decision regarding state aid implemented by Ireland to Apple (SA.38373) and the Commission's formal investigations regarding alleged aid to McDonald's (SA.38945).

Partners from left to right: Hanna-Mari Manninen (Finance; Capital Markets), Juha-Pekka Mutanen (Finance; Capital Markets), Mikko Eerola (M&A; Energy), Jan Ollila (M&A; Arbitration), Kai Holkeri (Tax)

Kai Holkeri

Partner, Head of Tax & Structuring

Katja Rajala

Senior Associate, Tax & Structuring


The Finnish National Implementation of the GDPR On Its Way

From Regulating Personal Data Files to Enhancing Data Protection

The clock is ticking - there is less than a year until the GDPR (the "General Data Protection Regulation") comes into effect. The European data protection authorities are doing their best to give guidance on how to interpret the regulation. However, even though the purpose of the GDPR is to harmonize the European data protection legislation, some issues are left open to the member states. On 1st of June, D&I hosted an insightful morning seminar with a tasty breakfast and engaging discussions. We had the honor to have Mr Pekka Nurmi, chairperson of the Finnish Data Protection Board and of the Working Group responsible for assessing the implementation in the first phase, as a keynote speaker. At the event, the participants got a glimpse on how the Finnish data protection regime is going to look like in 2018.

As Mr Nurmi pointed out, the Finnish regulators aim to ensure that the Finnish national laws give companies established in Finland a competitive edge as far as possible. In general, many of D&I's clients see the data protection regime not only as a challenge but also as an opportunity. Certainly, we at D&I think that the regulatory regime is an opportunity for companies to embrace the new age of digitalization, and we strive to give our clients the best tools to get the most of the data protection laws. At D&I we see data protection, as well as all the other legal issues, as an intertwined area composed of various legal questions that relate to several fields of law. Therefore, we engage the full spectrum of our expertise in every assignment.

The details of the national implementation will be out before midsummer, but we can already point out three interesting and relevant aspects that should be noted from the proposal.

1Filling the Gaps
First and foremost, it is highly likely that by 2018 there's going to be a new Finnish general data protection law ("tietosuojalaki"). The Finnish general data protection law will be based on the GDPR text and will only cover specific sector that are not regulated by the GDPR.

The GDPR leaves some areas open to be decided upon by the Member States. For example, the processing of personal data relating to criminal convictions and offences by private entities is lawful only when authorized by the European Union or the Member State laws. All such provisions will, to the extent possible, be found from the general data protection law. However, some practices need to be regulated in sectoral laws. For example the processing of information related to customer misconducts by credit companies has been considered lawful when based on the prior authorization of the Finnish Data Protection Board. Such authorization procedure will in all likelihood be in place also under the GDPR, but regulated in separate sectoral laws. The Working Group is at this point assessing only the necessary laws and regulations, and all the sectoral laws will be reviewed by the competent ministries in the second phase of implementation.

2The Empowered Authority
The Finnish supervisory authority will be the data protection ombudsman. As Mr Nurmi pointed out, the data protection ombudsman's office is understaffed, as the workload is going to increase rapidly and extensively.

Indeed, we forecast that there is a need for an increase in the resources of the Finnish data protection ombudsman - our partner, and head of Data Protection, Marketing & Consumers team, Jukka Lång pointed out that the resources in 2017 are almost similar to what they were in early 2000's when he worked at the data protection ombudsman's office as an inspector. Time will show how prepared and well funded the new authority will be, but we find that it is in the interest of every company that the Supervisory Authority is capable of giving guidance to the companies facing increasing data protection issues in their everyday business.

3Disputes - What If? And What Then?
As the sanctions under the GDPR are much higher than any possible sanctions under the data protection laws currently in force in Finland, the likelihood of data processing related disputes, and the risk related to these, is much greater. The Working Group proposes that a "Sanctions Board" is created in addition to the data protection authority. The Board will probably consist of 5 lawyer members and it will be responsible for deciding the GDPR based sanctions based on data protection ombudsman proposal. As the sanctions under the GDPR are fairly high and harmonized within the EU, we will surely see long trials all the way to the European Court of Justice. Additionally, as our Partner and Head of Dispute Resolution Jussi Lehtinen pointed out, we will probably see many long and complicated disputes that include administrative procedures on related to the sanctions as well as parallel or follow on civil procedures for the damages. (Read More on D&I Dispute Resolution and Data Protection Alert published on 1 June 2017 in Finnish).

Jukka Lång

Partner, Head Data Protection, Marketing & Consumers,

Tuomas Haavikko

Associate, Data Protection, Marketing & Consumers and Finance & Capital Markets,

Ricardo Gomes

Associate, Dispute Resolution and Data Protection, Marketing & Consumers


DR Meets Tech

Change is inevitable. Society undergoes alterations every day and one cannot look at the world as it is today but the world as it will be. We are surrounded by technology in our daily life. This also applies to lawyers - will they be replaced by robots and would that actually be a bad thing?

The above mentioned is one of the questions that was dealt with in D&I's Evening Classes (in Finnish Iltakoulu) where we had the honour to hear the visions of Riikka Koulu, a research fellow specialised in legal technology, legal automation and dispute resolution at the University of Helsinki. D&I has a special partnership with the Legal Tech Lab, an exciting project of the Faculty of Law, University of Helsinki, which has a mission to bring something new to the legal field: a new way of looking at legal services, new tools to facilitate participation and a forward-looking mindset.

Lawyers and the judicial system are often appearing to value stability and even seen to be unwilling to adapt to society's changes. Even today, the law sector in general is seen as conservative and traditional. However, it is undeniable that technology will change the role of lawyers. The question is how the lawyers can prepare themselves for the changes in order to be ready to engage the opportunities that technology offers.

Gaining current information on legal technology is the starting point. At the moment, we at D&I are using an intelligent software for litigators and arbitration practitioners which makes writing large submissions with numerous exhibits easy. It allows us to create an ebrief, an interactive submission to courts and/or arbitral tribunals in pdf format with hyperlinks to the relevant exhibits. You can access the exhibits by clicking the hyperlinks in the footnotes. This process will open a new pdf window where the exhibit is displayed for your review. This is a spectacular example on how legal technology can serve lawyers and dispute resolution by making the writing and reading of submissions more efficient and pleasant. In addition, it involves the client in the production process. The client will be able to follow the lawyers' argumentation and be able to give input on the submissions before they are filed.

For example, there is a tendency in international arbitration to depart from what can rightfully be called the "paper tsunami" to its digital equivalent: the e-arbitration. New terms have been coined for almost all steps of the arbitration proceedings: eBriefs, eDiscovery, eHearings, eArbitrators and eBundles. We believe that there is still a long way in litigation in Finland but some countries have a complete digital platform for court cases. Filings happen electronically, checking status of judgements can be done electronically, booking hearing dates can be done electronically etc. When everything shifts towards the digital sphere the intervention of AI becomes more relevant and prominent.

"Algorithms will become the new normal. AI taking care of the previously time-consuming routines, it is up to us lawyers to figure out how we will complete the big picture with the maximum value to our clients. Personally, I have always valued human interaction, listening and empathy, as key features in dispute resolution. To be honest, I welcome the robots automating everything else", says Partner Jussi Lehtinen.

Key Insights

  • Digitalization changes dispute resolution. Lawyers must be ready for changes and be able to understand their effect in practical dispute resolution.
  • Project management is essential. In the future, lawyers must recognise when the human labour is needed. Utilise this opportunity to allocate human labour more efficiently.
  • The price of anonymity and noninteraction can be high in dispute resolution. Prepare for disruption. Investing on the struggles of digitalization helps you to cope with the inevitable changes.
  • Observe the downside of efficiency in dispute resolution –ensure that you do not prioritise efficiency at the expense of legal security.

Jussi Lehtinen

Partner, Head of Dispute Resolution,

Ricardo Gomes

Associate, Dispute Resolution and Data Protection, Marketing & Consumers

Laura Parkkisenniemi

Trainee on D&I's Trainee Program


Catching Up with D&I Alumnus Teemu Oksanen of Futurice

Before joining Futurice as their Legal Counsel in 2017, Teemu Oksanen worked with passion at Dittmar & Indrenius for several years. At D&I Teemu specialised in environmental law, real estate and energy related matters, but advised clients also regularly on technology related matters as well as on general contract and commercial law. We met Teemu and asked him about the new and intriguing beginnings and challenges in his life.

From One Great Place to Work for to Another – What Made You Choose Futurice?

I really enjoyed my four years at D&I and its superb family-like working environment. I was not looking for a new job, but the opportunity made a thief. After several discussions with Futuriceans, I was convinced of their truly unique culture and decided to try my wings as an in-house counsel.

D&I and Futurice actually share the very essence of their cultures: the real trust in their employees and low hierarchy. After having worked at D&I, a strong company culture was and is always going to be a must for me.

What Are the Most Challenging and Inspiring Things About Working at Futurice?

Freedom is one the key elements of Futurice’s company culture. Futurice comprises of over 380 builders, innovators and change-makers who all are free to make any decisions by themselves as long as they are based on our 3x2 model. All they must do is to consider how the decision would affect their colleagues, the customer and the company financials - now and in the future.

I think that this freedom is the key to our success – everyone wants to give their best effort to the common goal. On the other hand, the freedom also means great lack of binding rules which can sometimes be a little frustrating for us lawyers.

What Legal Issues or Challenges Have You Got Coming Up on the Horizon Over the Next Few Months?

To be prepared for the General Data Protection Regulation is indubitably the most essential challenge for every corporate counsel this year. It will definitely be a challenge, but we also see great business opportunities it could provide us and our dear customers. Otherwise, the horizon for a lawyer in digital transformation business is wide and always somewhat unclear. An agile company needs an agile lawyer prepared to take on challenges and react quickly.

In the Era of Technology Revolution, How Do You Manage to Keep Your Head in the Game at Futurice?

Be curious. Ask why. Be agile.

The digitalization of the world and businesses is still in its infancy. But the change is ever-accelerating, and the legal framework is and always will be steps behind the real world. As a lawyer, I must note the legal risks in a project, but I am not here to shoot down any futuristic ideas our designers and developers may have by simply saying that something cannot be legally done. Instead, I want to be part of the team finding a legitimate way to turn those ideas into life-changing actions. As we like to say it: Love the problem, not the solution.

We Believe Here at D&I That Trust Is Paramount and Futurice Is a Company Built on Trust. What Does It Mean For You?

Futurice is indeed built on the foundation of trust. Many say that trust is an honour to be earned. We don’t think that way. We think trust is given, not earned, because in order to be trusted you have to start by trusting the others. When you place absolute trust in a person, the threshold to misuse it is extremely high - doing something that would result in losing trust is not even an option.

Be curious.
Ask why.
Be agile.

since 1899