Sat, Nov 25, 2000 - Page 1 News List

Court finds for Matra after seven years

By Irene Lin  /  STAFF REPORTER

Taipei's Department of Rapid Transit Systems (DORTS, 北市捷運局) has been ordered to pay more than NT$1.4 billion (US$42.5 million) in compensation to Matra Transport the French contractor which built the Mass Taipei Rapid Transit System's Mucha line.

The order is the result of a seven-year old legal battle between DORTS and Matra that eventually ended up in the Supreme Court.

Yesterday the Supreme Court upheld a judgement of the Taiwan High Court awarding compensation to the French company stemming from contract disputes concerning construction of the MRT line.

According to the decision yesterday, DORTS must pay NT$1.25 billion to Matra as compensation, as well as interest that could have been earned on the sum during the period of the legal proceedings. The total repayment to Matra will be in excess of NT$1.4 billion.

A DORTS spokesman said yesterday in the wake of the verdict that the agency might seek a retrial of the case. Should that fail, he said, payment to Matra will not be a problem since the city council has already passed a budget for it.

In 1988, Matra was awarded a contract to provide the electric train system for the Mucha line.

However, in building the infrastructure of the elevated line, Matra was forced to repeatedly postpone its installation of the train system as a result of which it claimed it had suffered heavy cost overruns for which it sought NT$2 billion from DORTS in compensation.

DORTS rejected the compensation demand and Matra took the dispute to the Chinese International Arbitration Tribunal, which decided in October 1993 that DORTS should pay NT$1.25 billion compensation to Matra.

Dissatisfied with the result, DORTS filed a suit at the Taipei District Court and won a court declaration nullifying the decision in 1994.

In the following five years, the case bounced between the High Court and the Supreme Court mostly on legal technicalities, but the decisions made during the period were all against Matra.

The decisions in favor of DORTS were justified for the reason that Matra did not make its compensation request within the deadline stated in its contract with DORTS.

But in July last year, the High Court, in its second review of the case, reversed its previous decision and ordered DORTS to pay the NT$1.25 billion compensation originally awarded by the arbitration tribunal.

The High Court said the two parties had signed an accord in April 1993, agreeing that any disputes between them would be decided by the arbitration system. DORTS therefore was contractually bound to honor the arbitration decision.

The Supreme Court affirmed the High Court's decision yesterday and declared the validity of the arbitration decision.

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