• Germany's news in English

Thai prince to pay €20m bond on seized jet

The Local · 1 Aug 2011, 10:10

Published: 01 Aug 2011 10:10 GMT+02:00

Facebook Twitter Google+ reddit

Maha Vajiralongkorn's Boeing 737 was seized at Munich airport on July 12 in a wrangle with the receivers of an insolvent German construction firm, who say they are owed more than €30 million by the Thai state.

Last month, a German court ordered the release of the impounded jet upon receipt of a €20 million guarantee, after assurances from Thai authorities that it was the private property of the prince and not that of the Thai state.

A statement released by the prince's office late Sunday said that to avoid problems between the two countries, the royal would "offer his personal money to stop the dispute" involving the German firm Walter Bau.

"Even though Crown Prince Maha Vajiralongkorn does not have any part in the dispute between the Thai government and Walter Bau AG, it has affected him and his reputation," the statement said.

It did not make clear how much the prince would pay out,, though it is thought he is paying the full €20 million ordered by the German court.

The German court said it set the guarantee to reflect the estimated value of the plane, which the prince is said to often pilot himself.

Court officials said the guarantee was needed after documents from Thai authorities provided only a "presumption of ownership".

Thailand's Foreign Minister Kasit Piromya flew to Berlin following the seizure of the aircraft, calling the incident a "huge mistake" and meeting a senior German foreign ministry official to press for the plane's release.

The German government had stressed that it was a matter for the courts.

Story continues below…

The business spat goes back more than 20 years to the involvement of the German company DYWIDAG, which merged with construction firm Walter Bau in 2001, in building a motorway link between Bangkok and the city's Don Muang airport.

After "numerous breaches of contract by the Thai government", Walter Bau, by then insolvent, in 2007 claimed for damages.


The Local (news@thelocal.de)

Facebook Twitter Google+ reddit

Your comments about this article

14:38 August 1, 2011 by oldWine
And how much Libians to pay as German Govt willing to give some loans which the Libians don't asked for?

What planes of Air Libya will be seized?

Really likings the civilized actions of Germ-many.
16:14 August 1, 2011 by Der Grenadier aus Aachen
I'm pretty sure helping a nation in a state of civil war pay for essentials isn't quite the same thing as a nation at peace refusing to pay it's debts.

You are such an epic troll.
16:53 August 1, 2011 by Soonerdiver
Der Grenadier... I wasn't aware that Libya is in a state of civil war! Actually it is more like "some people" not happy with their government performing a major act of civil disobedience; similar to Egypt.
19:43 August 1, 2011 by The-ex-pat
I would love to know who did the valuation for all this. Probably some clueless bureaucrat. Boeing 737, they all look the same lol The aircraft in question, a 15 year old 737-400 has a street value on a good day of around €5 million!
22:41 August 1, 2011 by Dizz
And all we know is that the Thai government didn't pay the German firm. We don't know if the German firm performed satisfactorily, if all other contractors were similarly "cheated" or whether everyone else was paid and for some "mysterious" reason Walther Bau wasn't... etc etc.

I love that the press only provides sufficient data to reinforce preconceived xenophobic notions but not enough to form informed opinions.
00:07 August 2, 2011 by Der Grenadier aus Aachen
Dear God, what a bunch of trollery. Ok, one at a time.


Let's see. Both sides have troops; even Regulars, these days. Check. Both sides have a political leadership. Check. Both sides have Generals. Check. There are regular engagements and ground is won and lost every day, after heavy fighting. Check. Sounds like a civil war to me.


How does "the highway is used every day and is a major transportation hub" sound to you for "satisfactory"?

Reading is great stuff, folks.
05:00 August 2, 2011 by wenddiver
I doubt if this mess will be good for Germany in the long run. The Thai People do not even point their hands or feet in the direction of pictures of the Crown Prince out of respect. It is considered bad form not to wear log sleeve shirts and pants when visiting a Thai government Office.

The Prince never refused the debt and I doubt if Germany would have seized the Plane of a visiting Western Leader no matter how much money their Country owed. If that is he Standard, Germanymust have quite a collection of Aircarft from Africa and Southern Europe.

A nice note requesting assistance in settling the debt between the President of Germany and the King of Thailand would probably have been more successful.
22:15 August 2, 2011 by Dizz
@grenadier: so sorry to weary you by suggesting something so outrageous as that there might be more to this than we currently know.

to answer you specifically, can you confirm that the project was on time, that remedial work was not required, that another contractor was not brought in at some point to finish or correct mistakes by the first, in short that there was no provocation or justification for this suspension of payment which, from a short search about the government of thailand's credit worthiness and payment record seems quite atypical? maybe you do. or maybe you just like going off half-cocked with your clever internet slang.
06:22 August 3, 2011 by Der Grenadier aus Aachen

Yes, yes, and no.

This is very simple. In the early 1990s, DYWIDAG agreed to take part in the construction of a toll highway in part by profit share. After the highway was constructed, the Thai government began to legislate out previously agreed-upon provisions of the contract. This included things such as reductions in the toll fares, free tolls through certain areas, etc. This violated the bilateral investment treaty. In addition, several invoices related to the initial construction remained unpaid, which were the responsibility of the Kingdom of Thailand, and those were brought up as well. Both of these issues were presented to the UN Commission on International Trade Law. The tribunal's decision was simple; by dramatically changing, and failing to protect, the expected revenue of the venture, the KoT was in breach of contract. The same story happened again in a US court, and in a German court, and all ruled in favor of the company. The company then took it's case in front of an arbitration tribunal in Geneva - WHICH THE KOT AGREED TO - and they, again, ruled in favor of the company.

This was in 2005. Six years passed between the initial decision, and the successor company's request to impound assets. That can only be described as the height of patience. As a last-ditch effort, the KoT actually stated that the successor company, Walter Bau, had no right to compensation because it is not in a partnership with a Thai company as DYWIDAG was, which is required to do business in Thailand on that scale. Never mind that at the time of the work and the contract, all legalities were in place and correct.

By the way, as far as the faith and credit of the Thai government goes, let me hand you this quote here: "Kittipong Urapeepattanapong, chairman of the Bangkok branch of international law firm Baker & McKenzie, told the Bangkok Post that cases like this show that arbitration is a difficult way to settle contractual disputes since the government often doesn't honour the arbitration rulings." per way of the Bangkok Post. In other words, the Thai government doesn't pay it's bills when it doesn't want to.

So, no, I am not going off half-cocked; I'm rightfully upset at these maneuvers to avoid paying an honest bill.
00:23 August 4, 2011 by Dizz
@Grenadier: Blimey. If half of that is fact then I don't disagree with you. I actually didn't agree or disagree to start with, I simply stated that the press was not providing enough background to form an informed opinion, which is what you at least have tried to do. I still maintain that on the whole KoT honours its contracts and obligations as can be imputed from their continuing ability to access foreign capital and contractors. They are by no means an ideal partner. The military has too much influence, transparency is middling to low and over the last three years political uncertainty has drastically reduced their attractiveness but through all of this KoT's counterparty-risk has not been directly impugned. There are individual cases in every country where disputes between the government and contractors have arisen and in some of those cases, remained unresolved for long periods. This instance, however unfortunate is neither typical nor definitive of foreign commercial experience in dealings with KoT.

So who are you, you're either a part of this story or you spent most of today on the internet building your rebuttal!

@wendiver: thank you for keeping the topic on the aeroplane from which grenadier and I have strayed a little in our debate! You may be right, of course it can never be proved and the truth is, most non-western countries accept or at least expect such uneven treatment as the reality in which they must live and operate.
Today's headlines
Long-vanished German car brand joins electric race
Photo: DPA

Cars bearing the stamp of once-defunct manufacturer Borgward will once again roll off an assembly line in north Germany from 2018, the firm said Wednesday.

Eurowings cabin crew union to strike all day Thursday
Photo: DPA.

UPDATE: A union representing cabin crews on Lufthansa's budget airline Eurowings has announced that strikes will last all day Thursday as ongoing contract negotiations continue to falter.

Hesse hopes to set example by building Iraqi orphanages
Refugee children in northern Iraq. Photo: DPA

The wealthy central German state of Hesse has set aside €1 million to build a school, family homes and an orphanage in northern Iraq, in an effort to help refugees there.

The Local List
10 German clichés that foreigners get very wrong
David Hasselhoff. Photo: DPA

Whether it be efficiency, humourlessness or a love of a certain Baywatch star, there are many cliches stuck in the heads of foreigners about Germany. But how true are they?

Fake Germanwings victim relative convicted in Cologne
A torn piece of metal at the crash site in 2015. Photo: DPA

A German court on Wednesday gave a woman a year's suspended jail sentence for posing as the cousin of a victim in last year's Germanwings plane crash and obtaining compensation offered by the airline.

Couple accused of torturing, murdering women go on trial
The so-called 'house of horrors' in Höxter where the couple allegedly tortured and killed women. Photo: DPA.

A couple accused of luring women to their village home with personal ads started trial on Wednesday over charges that they tortured and killed at least two of their victims.

After July attacks, govt drafts new video surveillance law
Photo: DPA

The Interior Ministry is drafting a law which will enable public spaces to be filmed for surveillance purposes as a reaction to deadly attacks in July, according to a newspaper report.

Merkel: murky internet giants distort perception of reality
Angela Merkel. Photo: DPA.

Chancellor Angela Merkel called on Tuesday for internet giants to make public their closely-guarded algorithms, claiming that they are not giving people diverse enough information.

Pegida leader 'paid court costs with group's money'
Pegida leader Lutz Bachmann. Photo: DPA.

The leader of the anti-Islam movement reportedly used money from Pegida's coffers to pay for two personal court cases, German media reported this week.

Anger as Berlin scraps Turkey concert on Armenia genocide
The Dresden Symphony Orchestra. Photo: DPA

Germany's foreign ministry Tuesday scrapped a planned symphony performance on the Armenian "genocide" in its Istanbul consulate, sparking accusations that it was caving in to Turkish pressure.

10 ways German completely messes up your English
Sponsored Article
Last chance to vote absentee in the US elections
Germany's 10 most weird and wonderful landmarks
10 things you never knew about socialist East Germany
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
jobs available
Toytown Germany
Germany's English-speaking crowd