Soaring disputes

A German court ruled on Wednesday that an impounded plane belonging to the Thai crown prince would be released in return for a bank guarantee of 20 million euros ($ 28.5 million).

Prince Maha Vajiralongkorn's Boeing 737 was seized at Munich airport last Tuesday as collateral in a long-running commercial dispute between a now-insolvent German construction firm and Thai authorities.

Walter Bau AG had claimed the plane was the property of the Thai state and therefore a legitimate asset to be used to settle outstanding debts dating back more than 20 years.

But a district court in Landshut, near Munich, said that it had received a statutory declaration from the director of civil aviation in Thailand that the plane belonged to the crown prince, not the Thai state. It therefore ruled that the plane was not related to the dispute and should be released with one stipulation.

Although a 2007 registry certificate was provided as proof of ownership, the court ruled that the estimated cost of the plane had to be levied as a guarantee.

"No guarantee means no take-off," said the vice president of the court, Christoph Fellner.

"If everything goes well for the prince and we establish that the aircraft really belongs to him, than he will get his bank guarantee back," Fellner added.

Relations at risk

The incident had threatened to strain Thai-German relations and was described as a "huge mistake" by the Thai foreign minister during a visit to Berlin last Friday.

Kasit Piromya met senior German foreign ministry official Cornelia Pieper to push for the aircraft's immediate release, asserting the dispute had "nothing to do" with the crown prince.

"If this takes too long, it might affect the feelings of Thai people towards German people and the country because this is related to the monarchy," Kasit warned.

In response, the German government expressed concern about the incident, but insisted it could only be resolved by the courts.

Although it appears the plane will now be returned to the prince, the commercial dispute which prompted its seizure is far from over.

Insolvency administrators are still trying to retrieve 30 million euros from the Thai government on behalf of Walter Bau AG.

Escalating dispute

In the 1990s, the construction company was part of a joint venture to construct a 26 km (15 mile) toll road between Bangkok and the former international airport Don Muang.

A disagreement over the toll fees prompted the Walter Bau AG to claim contractual obligations were not being met.

In 2007, the company - which was by then insolvent - claimed damages and was awarded 30 million euros compensation by an international tribunal in Geneva, which the Thai government rejected.

"We have been trying for years ... to have our justified demands for more than 30 million euros met, and this drastic measure is basically the last resort," Walter Bau's insolvency administrator Werner Schneider said when the plane was seized.

Last week, a spokesman for the Thai foreign ministry said Walter Bau's case against the Thai government had not reached its final conclusion as its lawyers were still in the process of appealing in a court in New York.

Author: Charlotte Chelsom-Pill (Reuters, AFP, dpa)

Editor: Susan Houlton