Sat, Jun 17, 2000 - Page 17 News List

Eurotrain appeal rejected, might go international

By Irene Lin  /  STAFF REPORTER

The Alstom-Siemens Eurotrain consortium has vowed to fight on, despite suffering another setback in its legal action against the Taiwan High Speed Rail Corporation (THSRC, 台灣高鐵公司).

The Taiwan High Court yesterday rejected a Eurotrain appeal seeking an injunction preventing its former partner from signing a contract with its Japanese rival, Shinkansen, to build the country's high-speed railway linking Taipei to Kaohsiung.

Following the High Court decision yesterday, the Eurotrain consortium revealed it is contemplating taking the case to the Singapore International Arbitration Center and seeking compensation from the THSRC for what it called a breach of the 1997 accord.

Phai Hua Way (許偉勳), a Eurotrain spokesperson in Taipei, told the Taipei Times yesterday "there are many possibilities, and international arbitration is one of them."

He also confirmed that Eurotrain is still continuing with "various efforts" to win back the deal, in addition to the legal actions.

The filing of the initial injunction request in the Taipei district court was prompted by the THSRC's announcement on Dec. 28 that it was awarding priority negotiating rights to the Taiwan Shinkansen Consortium (TSC, 台灣新幹線聯盟).

Furious at losing the construction bid to the TSC, which is led by Mitsubishi Heavy Industries, Eurotrain requested a court order in mid-January to suspend any further negotiations and prevent the signing of a contract between the THSRC and the TSC.

Eurotrain alleged the dramatic switch was in breach of the 1997 Eurotrain-THSRC agreement, which it claimed had obliged THSRC to sign a contract with it as long as its construction prices were considered reasonable.

However, the High Court maintained the agreement did not give Eurotrain a guarantee to obtain the NT$95 billion contract, nor did it give the European consortium "exclusive" rights to negotiate with the THSRC.

As a result, the court concluded that Eurotrain cannot assume the 1997 accord prohibits the THSRC from signing contracts with any other parties.

The contract for the north-south high speed rail project, with an estimated budget of over NT$400 billion, was hotly contested by two local groups, the THSRC and the Chunghwa High Speed Rail Consortium (中華高鐵聯盟).

In 1998, the THSRC beat Chunghwa to the project based on a plan which offered to build the line with no government funding and proposing the use of the Eurotrain system.

However, the THSRC switched to a partnership with the TSC in December last year, with the two parties signing a memorandum of understanding for the purchase of the core system on June 13.

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