Taiwan seeks new compensation over France arms deal

12th October 2011, Comments 0 comments

Taiwan said on Wednesday that it was seeking nearly $100 million in compensation from France, in the latest twist to a long-running kickback scandal over the 1991 sale of warships to the island.

Taiwan received $875 million from French defence giant Thales in July, after the company lost an appeal over wrongful payments of commissions on the Taiwanese frigate order 20 years ago.

But the navy has now found new irregularities pointing to illegal kickbacks in a contract to supply parts for the six Lafayette-class frigates, Taiwanese Defence Minister Kao Hua-chu said.

"The navy is launching an arbitration process and we're confident that we'll win," Kao said in reply to a parliamentary question from ruling-party lawmaker Lin Yu-fang.

According to Lin, under the French arbitration process, the navy is seeking Tw$3.0 billion ($98.36 million) in compensation from French shipbuilding company DCNS, which succeeded a firm called the Direction Construction Naval.

Taiwan's dispute with Thales had also gone to arbitration. The company then lost a French civil court ruling in June this year, leaving it with a bill of at least $591 million (407 million euros) plus interest and legal fees.

The French state must cover nearly three-quarters of the final bill, which came to $875 million, having guaranteed the "Bravo" warship contract when it was signed in 1991.

The original contract between Taiwan and Thales specifically excluded the payment of sweeteners to go-betweens.

© 2011 AFP

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