Purchase /Sale Agreement between Bangkok Metropolitan Administration (BMA) and Steyr-Daimler-Puch Spezialfahrzeug GMBH (SSF) (the Agreement) in connection with the Agreement of Understanding between The Republic Of Austria and The Kingdom of Thailand dated 27th August 2004 (the AOU)
We refer to your letter No. GorThor 0200/2171 dated May 2,2006 which referenced the April 30, 2006 Publications in various Thai newspapers reporting on comments made by SSF in relation to the Agreement further to which you have requested clarification on the statements that have been made in this regard.
First, I would like to state that SSF has the right to counter the misinformation which is given to the local press by certain persons. According to the opinion of our legal advisers in Austria and Thailand any statements that were made to the press about the effectivness of the Agreement are contractually and factually correct.
The basis of our statements is founded in Article 9.1 of the Agreement, which states:
9.1 “This Agreement will come into force with opening of L/C in favour of and acceptable for the Seller”
There is no doubt as to the meaning of this provision of the Agreement. The Agreement only came into force once the L/C was opened, thus, our statement was and remains correct. Should Governor Apirak have not opened the L/C, the Agreement would have not come into effect and consequently the delivery of the fire fighting vehicles could not have taken place.
The AOU, the Government to Government level agreement, on the other hand stipulates in Article 2:
“This Agreement of Understanding shall come into force with its signature and shall remain until the complete fulfillment by both Parties to the agreement of all their obligations thereunder.”
Thus, while the Agreement did not come into force until the opening of the L/C, the AOU, which sets forth the understanding and basic agreement between the governments of both Thailand and Austria, was effective from signing. It is based on the fact that the AOU was already effective and the terms of the Agreement already negotiated and agreed between the BMA and SSF that we honestly made the statement in our letter to the BMA dated December 29,2004 as was enclosed in your letter to us, that we were not in the position to amend anything in the AOU and the Agreement at such time. Based on such facts, the statements made to the press are indeed correct for which no verification is needed.
You have stated that we may consider your letter to be an expression of the BMA’s willingness to enter into discussion towards the termination/cancellation of the agreement with SSF. Given that both the AOU and the Agreement have come into effect, and that SSF have complied in all respects with the Agreement, we do not see that there are any grounds upon which the Agreement could be terminated/cancelled. The fact that for whatever political and/or personal reasons the BMA has come under harsh criticism by the Thai public does not serve as grounds for termination/cancellation by the BMA nor does it serve as grounds upon which the BMA, or any other governmental agency, may either directly or indirectly accuse SSF of any wrong-doing. The continued unwarranted scrutiny of the AOU and the Agreement, the failure of the BMA to adhere to the provisions thereof and both the veiled and unveiled criticism of our company is damaging SSF’s good reputation and cannot be tolerated any longer.
We trust that this letter serves as “appropriate clarification of the situation” as per your request