Bangkok Court Rules Against Government In Trade Deal

Bangkok court rules against government in trade deal

By John Le Fevre

BANGKOK (thaivisa.com): -- A Bangkok court has rejected a bid by the Bangkok Metropolitan Administration (BMA) to cancel a payment for fire trucks it had bought from Austrian company Steyr Daimler Puch.

The Central Intellectual Property and International Trade Court dismissed the application from the MBA, which had sought to annul the sixth installment of Bt780 million (about $US22.944 million) and cancel the total Bt6.7 billion (about $US197 million) contract.

The BMA had also requested an order from the court for a refund of Bt4 billion (about $US117.66 million) in payments already made.

However, citing international trade rules, the court rejected the application and said that as the issuer of the Letter of Credit, the MBA and the issuing bank, Krung Thai Bank, must abide by its conditions.

The court said the BMA had presented insufficient evidence to support any claim to break international trade procedures and any ruling that went again international convention, unless well supported, would damage Thailand’s international trade status.

The BMA had sought the order based on a ruling by the National Anti-Corruption Commission's (NACC) which said the contract for the fire trucks was mired in corruption and sold at a price above their ordinary market value.

The same court is due to hear the application by the BMA that Steyr should return Bt3.9 billion (about$US114.7 million), plus annual interest of 7.5 percent, on February 22 next year.

The next payment under the terms of the current contract is due to be made to Steyr on August 10.

-- thaivisa.com 2009-08-08