Taiwan awarded at least US$591 million in Lafayette ruling
ROC Central News Agency
2010/05/04 00:38:20
By Lee Ming-chung and Sofia Wu
Taipei, May 3 (CNA) An international court of arbitration has ruled that the French company that sold six Lafayette-class frigates to Taiwan in 1991 violated a provision in the contract that barred the payment of commissions, the Ministry of National Defense said Monday.
According to the ruling, Thales -- the French contractor that sold the Lafayette frigates to Taiwan when it was still known as Thomson-CSF -- will have to pay Taiwan a penalty of US$591 million as well as interest, litigation fees and other related expenses.
Altogether, the French contractor will have to pay Taiwan over NT$18 billion, the ministry said.
As the deal concerns Taiwan's national interests and the military's honor, the ministry said it will insist that the French contractor faithfully fulfill its obligations in accordance with the ruling given by the ICC International Court of Arbitration.
The main reason Thales lost the arbitration was because it violated Article 18 of the US$2.5 billion Lafayette contract, which prohibited payments of commission.
The request for arbitration was filed by Taiwan's navy in 2001.
Taiwan demanded the repayment of US$520 million of unlawful kickbacks, including US$495 million paid to Andrew Wang, a Taiwanese arms broker and US$25 million paid to Alfred Sirven, a former vice chairman of the French oil firm Elf-Aquitaine. Sirven was known to play the role of money laundering and allocation of the kickbacks.
Wang, the French arms supplier Thompson-CSF's agent in Taiwan, fled Taiwan following the death of Navy Capt. Yin Ching-feng under suspicious circumstances in late 1993. Yin is believed to have been poised to blow the whistle on colleagues who had allegedly received kickbacks from the Lafayette deal. Wang has been wanted by Taiwan authorities on a murder charge since September 2000.
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