Taiwan president welcomes French frigate ruling

4th May 2010, Comments 0 comments

Taiwanese President Ma Ying-jeou Tuesday welcomed an international court decision ordering French group Thales to pay back a huge sum that it overcharged the island in a 1991 warship sale.

In its ruling Monday, a Paris-based court of arbitration said the money was to make up for unauthorised commissions paid to help Thomson-CSF, which later became Thales, win a deal to sell six Lafayette frigates to Taiwan.

"The president welcomes the decision," Ma's spokesman Lo Chih-chiang told AFP.

Lawyers at Taiwan's defence ministry said Thales would pay an estimated 861 million US dollars to Taiwan, including 591 million dollars for damages and 270 million dollars in interest and legal expenses.

"This is belated justice but it is still justice," said Lin Yu-fang, a senior lawmaker of the ruling Kuomintang party and member of parliament's defence committee.

A French judicial probe opened in 2001 to investigate claims that much of the money paid by Taiwan a decade earlier went towards commissions to middlemen, politicians and military officers in Taiwan, China and France.

The contract governing the deal forbade such payments and stipulated that any illicit commissions would have to be repaid to Taiwan. The contract also said that any dispute would be settled by the panel of arbitrators.

"We will now seek the compensation from Thales in accordance with legal procedures to defend our rights," said deputy defence minister Chaou Shih-chang.

Chaou denied Taiwanese media reports that France had sought to avoid paying the huge amount of compensation by offering to sell Taiwan fighter jets or missiles.

A spokesman for Thales told AFP that the total sum was around 630 million euros (830 million dollars) including interest and that it would appeal.

The Thales company spearheaded the sale, but the main stake in the contract was held by French state-owned shipbuilder DCN. Several sources said the French state would have to pay 70 percent of the penalty.

In 2001, Taiwan's highest anti-graft body concluded that as much as 400 million dollars in kickbacks may have been paid throughout the course of the deal.

In 2008 a French judge ordered the dismissal without trial of one of France's biggest graft cases involving massive kickbacks in the frigate sale to Taiwan, citing a lack of evidence.

© 2010 AFP

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