Setback for Eurotunnel's pounds 1bn claim
Eurotunnel suffered a fresh setback yesterday after an independent panel of experts threw out the vast bulk of its pounds 1bn claim against the consortium that built the Channel Tunnel, Transmanche Link.
The five-man Anglo-French panel ruled that a large number of Eurotunnel's compensation claims relating to the passenger and freight shuttle trains supplied by TML were inadmissible.
The ruling is a blow to Eurotunnel, coming as it does a matter of weeks before it seeks approval from shareholders and banks for the refinancing of its pounds 8.7bn debt mountain.
A favourable ruling from the panel would have helped sentiment as it attempts to persuade shareholders to back a deal which could see Eurotunnel's bankers emerge with a stake in the tunnel of more than 60 per cent.
Eurotunnel sought to put a brave face on the defeat, saying that it may still take its claims to arbitration before the International Chamber of Commerce.
However, TML was cock-a-hoop with the verdict, saying it vindicated the position it had taken all along in its dispute. A spokesman for the five British and five French construction firms that make up TML said that the panel's ruling "nullified" Eurotunnel's pounds 1bn claim.
The panel said Eurotunnel was entitled to damages for faults in some of the rolling stock but could not seek compensation for loss of revenues owing to late arrival of the shuttle trains. It suggested that the two sides negotiate appropriate compensation between themselves.
According to TML, the claims upheld by the panel relate to less than 5 per cent of the pounds 1bn claimed and concern only defects on the HGV shuttles.
Eurotunnel disputed this, suggesting that while many of the claims had been rejected, it was still entitled to substantial compensation.
It said its board would decide whether to submit the claim to arbitration. Eurotunnel has 90 days to make a decision.
The panel, chaired by a French lawyer, Phillipe Malinvaud, also ruled that a pounds 40m counter-claim filed by TML was inadmissible.
However, TML indicated that the claim, for extra work done on the tunnel and the costs of defending Eurotunnel's action, was likely to be pursued since it was not rejected on substantive grounds.
The fleet of nine tourist shuttles and eight HGV shuttles cost pounds 705m to build compared with an original estimate of pounds 252m.
The HGV shuttles arrived six months late and the tourist shuttles a year late, forcing Eurotunnel to delay the launch of the respective services until May and December 1994.
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