Aukus: French naval group seeks compensation after Australia cancels deal

Aukus: French naval group seeks compensation after Australia cancels deal
Naval Group CEO Pierre Eric Pommellet said Australia announced the decision sans prior notice and with incredible brutality

France’s Naval Group said it will send a detailed and calculate proposal to Australia for them to compensate the company for scrapping the multi-billion dollar submarine deal.

Australia in 2016 had signed a deal with the Navy Group to procure 12 diesel-powered submarines worth $66 billion.

But last week, Australia joined the United States and Britain in a trilateral security partnership, under which Royal Australian Navy will receive eight nuclear-powered submarines.

The trilateral security partnership “Aukus” will involve wide-ranging projects on cyber warfare, artificial intelligence and quantum computing, and is expected to counter China’s influence in global politics.

Naval Group CEO Pierre Eric Pommellet said that a bill would be sent to Australia “in a few weeks”.

“Australia terminated the contract for convenience, which means that we are not at fault. It is a case that is planned for in the contract and will require payment of our costs that were incurred and those to come, linked to the demobilisation of infrastructure and IT as well as the redeployment of employees. We will assert our rights,” Mr Pommellet told the French newspaper Le Figaro.

Expressing shock at Australia’s decision, he added, “this decision was announced to us without any notice, with incredible brutality. Especially since all the lights were green”.

According to France’s defence ministry, the Naval Group had already completed $1.1 billion in work on the submarines, which was covered by payments already made by Australia.

Earlier, French defence minister Florence Parly hinted at seeking compensation for the cancelled deal. “We are studying all avenues,” she had said.

Since last week, France has hit out over Canberra’s decision to pull out of the deal calling it a “betrayal”.

“It was a stab in the back. We had established a relationship of trust with Australia. This trust has been betrayed,” French foreign minister Jean-Yves Le Drian told radio station Franceinfo.

Terming it a “huge diplomatic error”, France withdrew its ambassadors to the United States and Australia following the announcement.

“I think this has been a huge mistake, a very, very bad handling of the partnership because it wasn’t a contract, it was a partnership that was supposed to be based on trust, mutual understanding and sincerity,” French ambassador to US Jean-Pierre Thebault said before leaving for Paris.

France has however now reinstated its ambassador to Washington, following a conversation between President Macron and President Biden.

So far a number of European Union leaders have rallied behind France, which could delay Australia’s crucial trade meet with the bloc.