Thai Construction firm giant CH Karnchang loses legal battle

Construction News

Thai Construction firm giant CH Karnchang loses legal battle

The Supreme Court has ruled in favour of the Expressway Authority of Thailand (Exat), which will not have to pay 9 billion baht in compensation to giant construction firm CH Karnchang Plc in a dispute over the construction of the 55-kilometre Bang Na-Chon Buri expressway.

The court ruled on the case last Thursday, upholding an earlier decision by the Appeal Court.

The Expressway and Rapid Transit Authority (ETA), the original name of Exat, contracted Joint Venture BBCD Co, held 35% by CH Karnchang, to build the expressway above the Bang Na-Trat highway in 1995. The contractor said ETA delayed handing over construction areas for 11 months pending design changes.

Apart from CH Karnchang, the joint venture includes the German engineering groups Bilfinger + Berger Bauaktiengesellschaft and Dyckerhoff & Widmann AG.

The joint venture demanded 6.2 billion baht from the ETA for the delays and changes to construction methods. The expressway was completed in February 1999.

The dispute was then brought to the arbitration process.

The arbitration panel in 2003 ruled the expressway authority must pay compensation plus interest, for changing the design and delaying construction of the expressway. The ETA appealed the ruling at the Supreme Court.

The Supreme Court in 2006 reversed the arbitration panel’s ruling, saying the expressway construction contract was made through illegal process and that the ETA was not obliged to pay the compensation.

Citing the ruling, CH Karnchang two years later lodged a civil lawsuit against the ETA, demanding 9 billion baht in compensation, including interest on toll fees, from the expressway authority.

The company said the ETA should not have owned the expressway following the illegal contract, and that the right to occupy the infrastructure should have been returned to the firm.

In 2011, the civil court ruled against the expressway authority, demanding it pay 5 billion baht in compensation to the company.

The ruling was however overturned by the Appeal Court two years later. That decision now stands.


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