Thai govt pays €38m to Walter Bau, gets royal plane back

Originally published at Siam Voices on August 10, 2011

Bangkok Post reported on Tuesday night:

A court in Germany has released the Boeing 737 seized from HRH Crown Prince Maha Vajiralongkorn, former prime minister Abhisit Vejjajiva said on Tuesday.

Mr Abhisit told reporters the government has posted the full 38 million euros demanded by Walter Bau company in an account to be controlled by the German court.

As a result, the court released the jet. Terms of the agreement were unclear, as was the role of Mr Abhisit.

The government used public money for the deal. (…)

Germany ‘releases royal jet’“, Bangkok Post, August 9, 2011

AP‘s take:

A Munich airport official confirmed that German authorities on Tuesday had released the plane used by the Thai crown prince. “It has been released, he just has to tell the airport when he would like to fly,” Edgar Engert, a spokesman for the airport, told The Associated Press.

Thailand post German bond to free prince’s plane“, Associated Press, August 10, 2011

This is quite yet another intriguing turn of events, which probably ends an awkward spat between Thailand and Germany, that started almost a month ago over an issue that dates back even further, when a German construction firm built a tollway to Bangkok’s old international airport in Don Muang in a jointventure with the Thai government. The Thai government has broken several contractual obligations, including toll hikes and not building other roads that would compete with the tollway.

This German construction firm later merged with Walter Bau AG, another German construction firm that went bankrupt in 2005 – it was then when liquidator Werner Schneider found the old contract and demanded compensation from the Thai government. An international arbitration court ruled against Thailand in 2009 and ordered them to pay €30m ($42m or THB 1,2bn) – which has grown to almost €38m thanks to interests and the Thai government simply ignoring the order for years.

That’s when Werner Schneider had enough, decided to up the ante against the Thai government and seeked to impound the Boeing 737 of Thai Crown HRH Prince Maha Vajiralongkorn. That set off a bilateral spat in which Thailand, partly thanks to the confusing domestic media coverage, but also active disinformation and an apparent failure to distinguish a German court from the German government, had a weak case on their hands in not only trying to release the plane, but also fight against the order to pay the hefty sum to WalterBau AG.

The main legal battle focussed on whether or not the royal 737 plane is owned by the Thai government or is personal property of the Crown Prince. A German court has then decided to release the plane only for a €20m ($28.4 or THB 851m) deposit, which still kinda led some Thai news outlets to believe that the plane is actually freed, since there has been no verdict on the ownership status, which was supposed to take place later this August at a German court.

The lastest developments (which were also the last acts of the now former Thai government of Abhisit Vejjajiva and then-foreign minister Kasit Piromya) consisted of who was going to pay. Of course, it started off with Kasit refusing to pay the deposit, the Crown Prince then announced to pay from his own fund, to which Kasit was suddenly ready to flip the bill so the Crown Prince doesn’t have to until Abhisit overruled him and said no – as summarized here by Bangkok Pundit.

Now apparently the Thai government is actually paying the whole bill to Walter Bau after all. But why so suddenly? Was it an attempt to score one last ‘victory’ by the outgoing government by not only getting the royal plane back? Was the realization that the ‘new information’ presented to the German courts was neither new nor informative enough to be in favor of the Thai government? Apparently the Thai side ran out of arguments:

DLA Piper, the law firm representing Thailand in the case, said the country is committed to honoring its obligations and wants to rule out premature actions against assets of it or others.

“Thailand has strong grounds for challenging the confirmation of the award,” a DLA Piper lawyer, Frank Roth, said in the firm’s statement. “However, if the Berlin court finally concludes that the award against the Kingdom of Thailand is enforceable, the Kingdom of Thailand has made the funds available.”

Thailand post German bond to free prince’s plane“, Associated Press, August 10, 2011

This statement by this law firm is particularly interesting, since just a week ago they have released a press release sounding very confident and trying to convince that the €20m deposit to be a ‘victory’. But according to one Thai official, this whole thing is not done yet:

Thai Foreign Ministry official Chavanond Intarakomalyasut said a German court ordered the release of the aircraft Tuesday after the Thai government posted a 38 million euro ($54 million) bond, equal to the Walter Bau claim.

He said Thailand would continue to contest the claim on the tollway dispute until a definitive court ruling. Abhisit stepped down from the prime minister’s post last week after his Democrat Party lost a July general election.

Thailand post German bond to free prince’s plane“, Associated Press, August 10, 2011

Chavanond probably refers to an ongoing appeal at a New York court, even though the award itself is already final, unappealable and enforceable worldwide – the chances are reportedly ‘very slim’ (source) though that the Thai government would actually get anything from this procedure.

There’s of course at least one Thai news outlet that gets it wrong – you can all probably guess which one it is…

German authorities have agreed to withdraw impoundment of two 737 Boeing jets belonging to His Royal Highness Crown Prince Maha Vajiralongkorn parked at the Munich airport, after Thai government placed 38 million euros as guarantee, former prime minister Abhisit Vejjajiva said yesterday.

The Thai embassy in Germany is working further on the issue to retrieve the two aircraft [sic!], and a lawsuit will be soon lodged with German court, said Chawanong Intharakomalsut, secretary to former foreign minister Kasit Piromya. He did not give details over which grounds over the issue the lawsuit would appeal against.

Germans to free jet as govt pays Bt1.6-bn surety“, The Nation, August 10, 2011

Wait, wait – TWO impounded planes?! Who said that TWO planes have been impounded?! Yes, there was a second Thai royal plane landing on the runway in Munich, but the German liquidator was only considering to impound the second plane – if that would have happened, we would have already known about this, if not from the Thai press, then at least the German press! Even the Thai Embassy in Berlin has said nowhere about a second plane!

This leaves now the question with what they actually mean when they said that ‘public money’ has been used…?

Saksith Saiyasombut is a Thai blogger and journalist currently based in Bangkok, Thailand. He can be followed on Twitter @Saksith and now also on his public Facebook page here.