Discovery spat is ruffling feathers

Discovery Complex project at 302 Cau Giay street in Hanoi’s Cau Giay district - illustration photo

In its statement of claim, Cau Giay Service and Trading Investment said the French contractor had halted construction without reasonable cause, thus violating the terms of the contract.

The Vietnamese firm  also requested the foreign contractor return $989,400 handed over to the contractor on August 23, 2010.

In response, the Hanoi People’s Court immediately called for a freeze of the French contractor’s assets at the site of the 10,218 square metre, $172 million Discovery Complex project at 302 Cau Giay street in Hanoi’s Cau Giay district.

The court also opened an investigation into the case following the statement of claim from the project’s investor, a member company of Kinh Do, which is the developer of many high-end residential projects in Vietnam.

Tran Duc Minh, chairman of Cau Giay Service and Trading Investment, said: “When we saw Bachy Soletanche Vietnam JSC’s bidding documents, we believed that the contractor would complete the Discovery Complex’s diaphragm wall contruction within 77 days as scheduled.

We gave it money in advance as requested. However, it’s a pity that [the firm’s] fame doesn’t match its prestige.”

Minh said diaphragm wall construction was the most important stage of a building’s development. The contractor’s delay not only caused a loss of $386,473 in bank interest fees payable on  the advance money given to the contractor, but also a delay of the whole project as well as a reduction of customers’ faith.

Bachy Soletanche Vietnam maintains it stopped construction and withdrew all labour in December, 2010 as the Vietnamese investor was slow in issuing the  guarantee letter of paying it $2.4 million, which is half of the contract package’s value.

Pham Hoang Nhan, deputy general director of the French-backed firm, said that the company had reasonable cause for its actions and would see out the case which was affecting its reputation.

Minh, however, claimed  the contractor’s request was a fallacy as the payment guarantee letter should only be issued after the contractor returned the advance money it received in August 2010 and released its guarantee letter of completing the contract which guarantees 10 per cent of total contract’s value, and advance deposit guarantee.

The court is yet to hand down its verdict.

After sending its statement of claim to Hanoi people’s court, Cau Giay Service and Trading Investment brought on another contractor - Thien An JSC - to construct the Discovery Complex’s diaphragm wall.