Faroese sauna association sues Tórshavn municipality for 1.9 million krona

The small business association Sauna Dypp has filed a 1.9 million krona lawsuit against Tórshavn municipality, claiming lost revenue after the city reversed its decision to award the group a contract for a wellness facility in Álaker, reports Faroese broadcaster KVF.

The dispute stems from a public tender issued last August for wellness operations—including saunas and hot tubs—at three locations: Álaker in Tórshavn, Kollafjørður boat harbour, and Nólsoy. Only Sauna Dypp and another bidder, Saunagos, submitted proposals for the Álaker site. Evaluators declared Sauna Dypp the winner, with municipal technical directors, the harbour master, and city architect recommending a lease agreement.

One week later, however, the municipal building and planning committee overturned the decision, rejecting Sauna Dypp’s bid in favour of Saunagos. When the full committee voted on 29 September, members Anja Weyhe, Bergur Robert Dam Jensen, Birgir Nielsen, and Kári Johansen opted to void the original tender and issue a new one.

Sauna Dypp, which had been notified in August that it had won, argues the municipality’s confirmation email constituted a binding agreement. The group is now seeking 1.9 million krona in compensation for projected lost earnings, plus 42,750 krona in direct expenses incurred while preparing its bid.

Tórshavn municipality denies liability, asserting the city architect lacked authority to finalise contracts and that no financial commitment existed. The case may proceed to court unless a settlement is reached.