Taipei to appeal compensation

The Taipei City Government yesterday approved the filing of a suit of objection against the Supreme Court's order that it should pay NT$1.4 billion in compensation to the French engineering company Matra Transport.

Matra Transport helped build the Mucha line of the city's mass rapid transit (MRT) system. On Nov. 24, the Supreme Court upheld a judgment by the Taiwan High Court ordering the city's Department of Rapid Transit Systems (DORTS, 捷運工程局) to pay NT$1.4 billion (about US$42 million) in compensation to Matra Transport. The city was entitled to an appeal within one month of the verdict.

Wu Chyou-mei (吳秋美), vice director of the city's Information Department, said after the weekly closed-door city affairs meeting that the city has little choice but to take the action.

"If we don't file the suit, Matra may ask the court to carry out the order at any time. That will mean we will have to pay the NT$1.4 billion compensation immediately, but we think that we still stand a final chance of winning this case," she said.

To be eligible for filing the suit, Wu said, the city must deposit at the Taipei District Court funds to the value of the compensation ordered by the court. The money serves as a security deposit and will go to Matra if the court eventually rules against the city government.

The city government yesterday also approved use of the city council-approved NT$1 billion earmarked for the compensation as part of the security deposit. The remaining NT$400 million will be offset by an emergency fund set aside by DORTS.

The proposition to appeal the case will go to the city council for further examination and approval -- it is currently reviewing the city government's annual budget for next year.

DORTS and Matra have waged an eight-year legal battle over the compensation.

In 1988, Matra won the contract to build the electrical systems and trains for the Mucha line. It was later forced repeatedly to postpone the project, eventually resulting in what it claimed were heavy cost overruns. Matra then sought NT$2 billion from DORTS in compensation.

DORTS, however, rejected the compensation demand and Matra took the dispute to the Chinese International Arbitration Tribunal (中華民國商務仲裁協會). The tribunal ruled in October 1993 that DORTS should pay NT$1.25 billion in compensation to Matra.

Dissatisfied with the result, DORTS filed a suit at the Taipei District Court and in 1994 won a court ruling revoking the tribunal's decision.

Over the following five years, the case bounced between the High Court and the Supreme Court but the decisions were all rulings against the French contractor.

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 Supreme Court affirmed on Nov. 24 the High Court's decision to award Matra NT$1.25 billion in compensation plus interest during the period of the legal proceedings, bringing the total to over NT$1.4 billion.