French defense contractor Thales SA has wired court-ordered compensation of US$875 million to Taiwan for irregularities in the 1991 Lafayette-class frigate deal, the ROC Ministry of National Defense announced July 12.
“The outcome of this case upholds the military’s clean image and its efforts to protect the interests of the nation,” the MND said in a statement.
The payment came after the Paris Court of Appeals June 9 upheld the May 2010 ruling by the International Chamber of Commerce’s International Court of Arbitration that Thales had violated an article in the US$2.5 billion Lafayette contract prohibiting the payment of commissions to intermediaries. The MND first took the case to the ICC in August 2001.
Under the terms of the contract, Thales was to provide the ROC navy with six Lafayette frigates.
The MND said the money transferred by Thales, which includes commissions paid out, accrued interest, and legal and arbitration fees, will be handed over to the state’s coffers.
The ministry stressed that the case involved a commercial dispute and “would not affect the cooperative relationship between the militaries of Taiwan and France.”
The MND also expressed admiration for the French government’s position upholding the rule of law in handling the case. (SB)