Taiwan pleased with French frigate deal payment

10th June 2011, Comments 0 comments

Taiwan said Friday it was pleased that France would have to pay the island 460 million euros after defence giant Thales lost an appeal over wrongful payment of commissions on a warship order.

"We feel very happy and relieved by the outcome. We will follow relevant legal procedures to ensure Thales fulfil the ruling to defend our interests," defence ministry spokesman David Lo told AFP.

French Prime Minister Francois Fillon's office announced Thursday that the state would have to cover 72.5 percent of the massive bill the group now faces after an appeal court threw out its challenge to an arbitration panel's ruling.

France had guaranteed the "Bravo" contract when it was signed in 1991, and an emergency amendment to the government operating budget will now be sent to parliament in order to settle the matter.

In April last year an arbitration panel employed by Thales and the Taiwanese navy to settle their differences found that the French firm had wrongly paid commissions to intermediaries to secure the contract.

Thales appealed the private panel's decision in a civil court, but on Thursday its complaint was thrown out, leaving it facing a bill of at least $591 million (407 million euros) plus interest and legal fees.

The French defence and electronics firm signed the original deal to supply Taiwan with six Horizon-class frigates in 1991. The contract specifically excluded the payment of sweeteners to go-betweens.

France's Defence Minister Gerard Longuet said Thales would not appeal the latest ruling, which was based not on a re-examination of the case itself but on the conduct of the arbitration.

© 2011 AFP

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