Thales Loses Court Appeal, Owes Taiwan $591M

A French court on June 9 ordered defense giant Thales to pay the Taiwanese Navy almost $600 million, rejecting the group’s appeal against last year’s arbitration ruling.

An arbitration panel employed by two parties to settle their differences found in April 2010 that the French firm had wrongly paid commissions to intermediaries to secure a huge warship contract.

Thales appealed the private panel’s decision in a civil court, but its complaint has been thrown out, leaving it facing a bill of at least $591 million plus interest and legal fees.

The French defense and electronics firm signed the original contract to supply Taiwan with six Horizon-class frigates in 1991. The deal specifically excluded the payment of sweeteners to go-betweens.

Thales can still appeal the latest ruling – it was based not on a re-examination of the case itself but on the conduct of the arbitration – in France’s top appeal court, the Court of Cassation.

It was not immediately clear whether it would do so.