French firm to appeal ruling in Lafayette frigate deal

May 4, 2010, 16:07 GMT

Paris/Taipei - Partly state-owned French aerospace and defence company Thales said Tuesday it would use all available means to fight an international court's ruling that it had breached a contract in the 1991 sale of six frigates to Taiwan.

'Thales disputes the very grounds of this decision. The company will initiate all available proceedings and actions against this award, and will in particular file petition for nullity in front of the Paris Court of Appeal,' the company said in a statement.

On Monday, the International Chamber of Commerce (ICC) in Paris ruled that Thomson-CSF, the company out of which Thales was created, had doled out illegal commissions in the deal in which Taiwan paid 2.8 billion dollars for six Lafayette-type frigates.

According to press reports, Thomson-CSF paid 400 million dollars to a Europe-based Taiwan broker and 100 million dollars to Chinese officials to prevent them from blocking the deal.

The total award in the ruling, including interest, was about 630 million euros (826 million dollars). Thales said its share of the payment to Taiwan comes to some 173 million euros. The French state must pay the rest of the fine.

Taiwan had welcomed the decision by the ICC.

'This case affects our national interests and the Taiwan military's reputation,' the Defence Ministry said in a statement released Monday night.