CAT asks OAG to decide Huawei fine amount

Bangkok Post (29 November 2007)

CAT Telecom says it will not make a ruling on the fine to be imposed on Huawei Technologies but would rather ask the Office of the Attorney-General to decide on the amount. Gen Montri Sangkasarp, the board chairman, said that directors had decided not to make a ruling on the amount of fine to be imposed on the Chinese equipment supplier for the late delivery of the second phase of the CDMA mobile-phone network expansion project. Instead it would ask the Attorney-General by Dec 15 to proceed in accordance with established judicial procedure.

He said that CAT had to resort to the judicial procedure because it could not compromise with Huawei on the Rev A platform, which CAT considered as part of the original contract.

The CAT chairman said that under the contract, Huawei had to deliver the network in a form ready for use to CAT by Jan 26 but Huawei could not, and therefore had to be fined for the late delivery of the entire project amounting to more than 20 billion baht.

But Huawei views that the fine should be imposed only on the late delivery, from Jan 27 to Nov 15, of data software that is complementary and does not form part of the project, he said.

It views that the software is free and not an integral part, and that the CDMA network can start commercial service even without it.

The Chinese telecom supplier said it still could deliver 800 base stations under Phase 2 by schedule.

Huawei had delayed the delivery of the data software, citing the postponement of chipset deliveries from its overseas supplier.

But Gen Montri said that any buyer would want his order to meet what had been agreed on, and when the seller could not meet it, the buyer had the right not to accept the goods.

He added, however, that it was still uncertain if the dispute with Huawei could be settled within the term of this board, saying at least this board had performed its duty.

Huawei faces a 90-million-baht fine a day for late delivery.