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Taiwan seeking further French La Fayette-related compensation

ROC Central News Agency

2011/10/12 20:37:52

Taipei, Oct. 12 (CNA) The government is seeking more compensation from France for its violation of a no-commission promise in a sub-contract related to a 1991 deal in which Taiwan obtained six French-made La Fayette warships, Defense Minister Kao Hua-chu said Wednesday.

"We are confident of winning an arbitration for NT$3 billion (US$98.84 million) in compensation and interest from DCN International (DCNI), France, for its violation of a follow-up contract to provide components and spare parts for the vessels," Kao told lawmakers at a Legislative Yuan committee meeting.

The deal to which Kao was referring is the Basic Ordering Agreement (BOA) that both sides signed May 20, 1996.

Kao said the Navy has filed a lawsuit with an international court of arbitration against DCNI and that a hearing and debate session is scheduled for April next year.

In addition, the Defense Ministry has set aside NT$75 million in its 2012 budget plan as funds for new litigation.

Legislator Lin Yu-fang said that once it wins the case, Taiwan will be able to claim back a sum of money in the form of an "arbitration mortgage" and litigation fees, in addition to compensation.

French defense company Thales wired US$875 million into a Taiwan government bank account in July this year after losing an appeal in a case involving bribes paid to clinch the US$2.51 billion frigate deal with Taiwan in the 1990s.

An international court of arbitration ruled in April 2010 that the French contractor had to pay Taiwan 630 million euros, including a fine of roughly 433 million euros plus interest, litigation fees and other related expenses, for paying commissions in violation of the contract.

Thales, known in the 1990s as Thomson-CSF, which sold the frigates to Taiwan, paid out unauthorized commissions during the process of the sale.

The firm appealed the ruling at the Paris Court of Appeals, but its appeal was rejected in June, bringing to an end nearly two decades of legal wrangling between Taiwan and France.

Millions of dollars in illegal kickbacks are believed to be held in frozen Swiss bank accounts held by Thomson-CSF's agent at the time, Andrew Wang, and have become a principal focus of Taiwan's drive to get back the illicit commissions paid in the deal.

Wang fled Taiwan following the death of Navy Captain 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 La Fayette deal.

Wang has been wanted by the Taiwanese authorities on murder charges since September 2000. (By Chen Pai-huang & Bear Lee) ENDITEM/J