Friday, July 15, 2011

Kasit off to Germany to retrieve royal jet

Foreign Minister Kasit Piromya left for Germany last night to seek the release of HRH Crown Prince Maha Vajiralongkorn's plane impounded at Munich airport by German liquidators since Tuesday to recover debts in a commercial bankruptcy case.
Describing the plane seizure as a "huge mistake", Mr Kasit said he would inform the German government of his grave concern about the incident and would ask the German court to immediately release the plane.
"This airplane is personal property, not that of the Thai government. So the German government cannot seize it," Mr Kasit said.
He said a team of Thai lawyers including the attorney-general and a deputy director-general of the Treaties and Legal Affairs Department were sent to Munich on Tuesday to coordinate with German legal officials.
Mr Kasit said the government had written to and spoken with German foreign ministry officials and appointed a lawyer to defend the case.
"All of the Thai people are worried about what happened," he said.
The Thai government would study the court process because it was a unilateral action and it did not give a chance for the Thai government to dispute it.
The issue might affect bilateral ties between the two countries if the outcome was unreasonable, he said.
The plane seizure was ordered by the German court on Monday following a request from Werner Schneider, the insolvency administrator for German builder Walter Bau AG, to force a 30 million (1.26 billion baht) payment from the Thai state.
The action was based on a decision in 2009 of the United Nations Commission on International Trade Law for Thailand to pay Walter Bau more than 30 million for breaching a bilateral investment treaty between Germany and Thailand. The UN court found that the Thai government breached the terms of a toll road concession operated by a venture partly owned by Walter Bau.
Mr Schneider said the seizure followed repeated refusals by the Thai government to pay money it owes the company.
The commercial spat goes back more than 20 years to the involvement of the company DYWIDAG, which merged with Walter Bau in 2001, in building Don Muang Tollway between Bangkok and Don Mueang airport.After "numerous breaches of contract by the Thai government", Walter Bau, by then insolvent, in 2007 claimed for damages, the legality of which was confirmed by the 2009 court ruling, Mr Schneider said.
"We have been trying for years ... to have our justified demands for more than 30 million met, and this drastic measure is basically the last resort," Mr Schneider's firm said in a statement.
"While the ownership details of the airplane will have to be discussed, the seizure was an important step for us to get the negotiations going again," a company spokesman said on the telephone.
The plane, a 737-400 built in 1995, would most likely have a resale value of $5 million to $6 million (150 million to 180 million baht), said Paul Hayes, head of insurance at Ascend, an aviation consulting firm in London.
Walter Bau was one of the largest construction companies in Germany when it sought protection from creditors in February 2005, costing more than 4,000 workers their jobs.
Mr Schneider noted that in October 2005, he used the same tactic in Istanbul to impound an Airbus jet owned by Middle East Airlines in a dispute with the Lebanese government over debts owed to Walter Bau.
Thai Highways Department chief Veera Ruangsuksriwong yesterday insisted his agency was in the process of appealing against the decision.
Department sources said the German firm had no right to sue the Thai government as it was not a contractual partner in the Don Muang Tollway project.
Walter Bau was just a shareholder in Don Muang Tollway Co which built the tollway and held the concession to operate the project.
The government has already agreed to extend the concession for the firm and allow it to adjust the toll to make up for any damages caused by a previous state decision to freeze the toll and to allow ground traffic to compete with the company's business in the past, the sources said.
Stefan Duppel, the German embassy's charge d'affaires, said the airplane seizure was a normal legal action and the liquidators were not obliged to inform or consult with the German government beforehand.

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