Taiwan's navy has filed a US$590 million lawsuit against French military contractor Thomson-CFS (sic) over the 1991 Lafayette frigate deal, The Liberty Times reported yesterday.

Quoting an unnamed military source, the report said the navy had hired a French lawyer to file the lawsuit in a French court against Thomson-CFS, which has been renamed Thales.

The navy is demanding Thomson-CFS return a US$500 million kickback allegedly paid to officials from France and China to smooth the deal.

The navy is also seeking US$90 million for the damage the LaFayette scandal has caused to its image, the paper said.

The hearing for the civil suit will open next month, the paper said.

Taiwan ordered six Lafayette frigates from France in 1991 costing US$2.8 billion dollars to beef up its sea defenses against China. The six frigates are now serving in Taiwan's navy.

The contract barred the taking of commissions, but French middlemen sought US$500 million from Taipei to remove Chinese and French opposition to the deal.

China bars France, which has diplomatic ties with Beijing, from selling arms to Taiwan.

With acknowledgement to Taiwan Times.