Thailand’s Hopewell Project saga bombshell – Constitutional Court reverses 2002 ruling

Construction News

Thailand’s Hopewell Project saga bombshell – Constitutional Court reverses 2002 ruling

The government is expected to refuse to compensate Hopewell (Thailand) over the cancellation of a large-scale transport project about two decades ago.

Its latest stance follows a Constitutional Court ruling on Wednesday that said a Supreme Administrative Court verdict nearly 19 years ago was in fact a breach of the constitution.

The Constitutional Court was ruling on a petition submitted by the Transport Ministry and the State Railway of Thailand (SRT), which sought its clarification of a resolution passed by Supreme Administrative Court judges on Nov 27, 2002. The same court cited the judgement on April 22, 2019 when it ordered the SRT and the Transport Ministry to pay 11.88 billion baht in compensation to Hopewell (Thailand) for the cancellation of a contract in 1998 to build a 60-kilometre elevated highway and rail system in Bangkok.

The petition asked the Constitutional Court to rule whether the Supreme Administrative Court judges’ resolution on the statute of limitations in the case ran counter to the 1999 Establishment and Proceedings of Administrative Cases Act, and whether it breached the constitution.

The Supreme Administrative Court judges had ruled that the statute of limitations in the Hopewell case should be counted from the day the Administrative Court was founded — March 9, 2001.

It decided therefore that the company had sought the arbitration tribunal’s judgement within the legal time frame.

However, the petitioners said the 1999 law made it clear that the statute of limitations commenced on the first known day the dispute in the case is known.

A majority of Constitutional Court judges ruled on Wednesday that the resolution violated the constitution because the Supreme Administrative Court had failed to send it to parliament for inspection and did not publish it in the Royal Gazette as required by the law and the constitution.

These failures rendered the resolution unenforceable, the judges declared.

Prime Minister Prayut Chan-o-cha said on Wednesday that he had instructed a legal team to study the details of the ruling and the government would consider how to proceed.

“If the situation is reversed in favour of the government, this could save a lot of money,” he said, adding that the current government was having to step in and resolve a problem not of its own making.

Observers noted that the court’s ruling could prompt the Transport Ministry and the SRT to ask the Supreme Administrative Court to retry the entire case.

Transport Minister Saksayam Chidchob and SRT governor Nirut Maneephan said they would have to wait to see full details of the court’s ruling before taking any action.

Mr Nirut, however, said the ruling was legally binding on all state agencies.

“Once the full details of the ruling are released, we will do all we can under the law to protect the country’s interests,” Mr Saksayam said.

A Supreme Administrative Court spokesman said it would consider whether to accept a request for a retrial of the case pending the full details of the Constitutional Court’s ruling.

The Supreme Administrative Court’s ruling that the company be compensated tallied with one proposed by the Arbitration Tribunal on Nov 8, 2008, when it ordered the SRT and Transport Ministry to pay Hopewell compensation.

However, the Central Administrative Court nullified that ruling in March 2014.

The tribunal lacked the authority to decide on the Hopewell project because Hopewell filed its complaint after the five-year arbitration complaint period had ended, according to the Central Administrative Court’s ruling, which Hopewell appealed.

The contract to build the “Hopewell Project” was signed on Nov 9, 1990 and when the 30-year concession was granted in 1990, investments in it totalled 80 billion baht. The contract was terminated on Jan 27, 1998 by the Chuan Leekpai-led Democrat government, when Suthep Thaugsuban was transport minister.