The lawsuits were signed by King Power managing director Sombat Dechapanichkul and filed in the Civil Court by its lawyer Bundit Siriphan. The court set September 24 for the first hearing.

AOT nullified King Power's concessions, which also include the Hat Yai and Phuket international airports, on April 5 on the grounds that they breached the Public/Private Joint Venture Act.

"The nullification is unlawful use of law. The company passed qualification screening by AOT's committee. The company has hired contractors, recruited new employees, ordered products from all corners of the world for over three years. The company borrowed money from financial institutions for that and shoulders interest costs," King Power said in its affidavit.

King Power also cited Supreme Court ruling 508/1997, in which the court held that the Royal Thai Army was still subject to make payments to a private procurement company from which it had ordered electric saws but later cancelled the order, as applicable to its case.

"We want payment for the recruitment of people, construction works, product orders, as well as the tax burden incurring from the investment at Suvarnabhumi, Phuket and Hat Yai airports. We also want the upfront guarantee - which has been paid to AOT - back," King Power said.

AOT's board of directors, chaired by General Saprang Kalayanamitr, resolved to cancel the contracts in March based on the Council of State's ruling that they breached the public-private joint investment law.

Saprang also serves as deputy secretary-general of the Council for National Security, which overthrew the Thaksin Shinawatra government in September last year.

King Power was also told that its extension of the commercial area at Suvarnabhumi had caused damage to the airport and was not in line with international standards and resulted in security problems. It was ordered to remove its structures from the airport.

The two contracts were signed during the Thaksin administration, when Suriya Jungrungreangkit was the transport minister and in charge of AOT.

King Power bid for the concessions against other duty-free operators and beat them all when the AOT screening committee considered that it had been in the business for a long time and had tens of billions of baht in working capital.

King Power has operated duty-free shops for 16 years, including 15 years at Don Mueang Airport. It said on its website that it paid Bt7 billion in concession fees to the Thai government and created more than 3,000 jobs during that period.

Kesinee Tangkeaw

The Nation