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Supreme Court orders government to pay Fuji Heavy ¥35 billion over canceled attack copter deal

JIJI

The Supreme Court has upheld a lower court ruling that ordered the Japanese government to pay about ¥35 billion to Fuji Heavy Industries Ltd. over a canceled attack helicopter procurement deal.

The top court’s Second Petty Bench on Wednesday turned down the state’s appeal filed against the Tokyo High Court ruling that supported Fuji Heavy’s petition. The ruling thus became final.

In 2001, the Defense Ministry decided to introduce 62 units of the AH-64D Apache Longbow helicopter.

Fuji Heavy, which won the chopper production contract, paid license and other initial fees to U.S. aircraft maker Boeing Co. But the ministry canceled the contract after procuring only 10 units in fiscal 2002-2007.

At issue in the trial was whether there was an agreement that the ministry would reimburse the initial costs to Fuji Heavy.

Tokyo District Court dismissed the company’s claim in February 2014.

But Tokyo High Court overturned the ruling in January this year, saying that there was no legally binding agreement between the two sides but that it is widely assumed between the ministry and defense equipment suppliers that the ministry reimburses such initial investment before the completion of procurement.