King Power makes strong progress in Thai airport dispute; ‘compromise’ likely says AoT – 05/01/08

THAILAND. King Power International appears to have turned the corner in its long-running and bitter dispute with Airports of Thailand (AoT). Reports in the local press today quoted AoT President Chana U-sathaporn as saying a compromise will be worked out.

Last March the AoT announced the termination of both King Power’s contracts at Suvarnabhumi Airport – the master commercial concession and the duty free concession. At that time the AoT board claimed the contracts were in breach of the Thai Public-Private Joint Venture Act, as they had not fulfilled the requirement that all investments worth at least THB1 billion must be approved by all agencies involved.

King Power International swiftly struck back by filing two civil suits on 4 June and a THB68 billion (US$2.1 billion) compensation claim.

‘AoT softens its stand against King Power’ – how The Bangkok reported the latest positive developments in the long-running dispute today

But in recent weeks things have swung positively in King Power’s direction.

The Bangkok Post reported today that AoT President Chana had consulted a prosecutor representing the airport company following the Administrative Court’s ruling on 28 December that the case against King Power should be heard in the Civil Court rather than the government-run Administrative Court, because the dispute involves civil matters.

The Civil Court encouraged AoT and King Power to reach an out-of-court settlement and inform the judge of the outcome by the end of this month. Air Marshall Chana told The Bangkok Post that a compromise would be worked out pertaining to the use of commercial areas at Suvarnabhumi Airport.

He said he would inform the AoT Board about the outcome of talks during its special meeting in Chiang Rai tomorrow.

It would also update the Board about a call from King Power to have permanent AoT key cards re-issued to its staff for entry to the passenger terminal and assurances that it can continue decorating shops in the commercial areas.

The Moodie Report spoke to King Power this week about recent developments, which the company described as “positive”. In keeping with its position throughout the dispute, it is limiting public comments and letting Thailand’s legal process, in which it has faith, take its due course.

UPDATE SUNDAY 6 JANUARY: In further evidence that a solution is likely, fellow Thai national newspaper The Nation also reported (click here for its full story) on 5 January that AoT may be able to settle its dispute with King Power International. It wrote: “A source at AoT said chances were high the company would be able to sort out the conflict with the duty free shop operator under the next government if it was formed by the PPP, whose members are mostly from the now-defunct Thai Rak Thai Party, which awarded the contract to King Power.

“The source said the case might be settled out of court in what he called a win-win solution. The new government is likely to come from the PPP, which is likely to be friendlier to King Power than the current government.”


“˜Round 1 to King Power’ says The Nation as retailer-airport dispute remains with Civil Court – 30/12/07

King Power dispute dents Airports of Thailand’s performance; concession income drops sharply – 04/12/07

King Power given 60-day notice on its Thai airport operations, claims report – 12/10/07

Airports of Thailand fires the latest salvo in escalating Bangkok dispute with King Power – 26/09/07

Food & Beverage The Magazine eZine