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 Lafayette warships, Minister of National Defense Kao Hua-chu (高華柱) said yesterday.
“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 committee meeting at the legislature.
The deal to which Kao was referring is the Basic Ordering Agreement that both sides signed on 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 Ministry of Defense has set aside NT$75 million of next year’s budget plan to fund the new litigation.
Chinese Nationalist Party (KMT) Legislator Lin Yu-fang (林郁方) said that, once it wins the case, Taiwan would 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 to a 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 last year that the French contractor had to pay Taiwan 630 million euros (US$867 million) 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 an end to nearly two decades of legal wrangling between Taiwan and France.
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