Firm told to pay $65 mln for ruining plane

BEIJING Thu Dec 6, 2007 9:17am EST

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BEIJING (Reuters) - A Chinese state-run company has been ordered to pay a record $65 million in compensation, plus interest, for destroying a Malaysia Airlines plane with falsely declared cargo of caustic chemicals.

The Airbus A330 was ruined when 80 canisters belonging to the Dalian branch of the China National Chemical Construction Corp. leaked an extremely corrosive chemical, oxalyl chloride, in the cargo hold in March 2000.

The crew of the passenger flight from Beijing detected an acrid odor before landing in Kuala Lumpur en route to India and five ground handlers were taken ill when unloading the canisters to be sold to an Indian company.

The passengers disembarked without incident, but the $130 million aircraft was so badly damaged that the manufacturer concluded that it could not be repaired.

The Beijing Higher People's Court ruled Wednesday that the Dalian company should bear the main blame by declaring the canisters contained a safe chemical in the form of powder, the Beijing Times said Thursday.

The company had to pay five foreign insurers for Malaysia Airlines $65 million plus interest in compensation, ending a five-year lawsuit, the newspaper said.

The compensation ordered by the Beijing court was the highest ever for a civil lawsuit in the Chinese capital, the Beijing Times said.

Both sides had yet to decide whether or not to appeal the ruling, the newspaper said.

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