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Biggest Compensation Case Begins in Shanghai
The first hearing on Shanghai's biggest compensation case -- involving 430 million yuan (US$52 million) -- began in Shanghai Friday.

The plaintiff, Shanghai Shengfan Real Estate Development Company, is demanding the money from Korean Air, based in South Korea, when one of its cargo flights crashed onto a construction site on April 15, 1999.

The MD-11 plane flying from Shanghai to Seoul plummeted to the site in Qinchunyuan Living Quarters in Minhang District minutes after it took off from Hongqiao International Airport.

Eight people were killed, including three crew members, and 42 were injured.

Occupying an area of 46.6 hectares, the living quarters was a project by the real estate company.

"All of the preparation work, such as relocating former residents there had been completed, which cost about 250 million yuan (US$30.2 million)," said Yan Jiazhu, a lawyer for the company.

The plane crashed onto four buildings, whose bases were being laid.

At the time, houses of 100,000 square meters had been completed and some had been occupied by residents, while many homes were still under construction.

The plane crash was equivalent to an earthquake, the plaintiff said in its appeal.

To make matters worse, the accident affected the sale of housing on the site, according to the plaintiff.

"People are frightened, and many cancelled their orders on the houses," said Min Manjun, another lawyer representing the plaintiff. "The relatives of the crew members came to commemorate the dead a year later, which again made sales worse."

Statistics from the district's real estate trade center show the price of houses in general has kept rising, while the price of houses on the crash site has slumped.

"Around the area, the price for each square meter is around 3,000 yuan (US$360), but few were enticed to the quarter with the price of 2,500 yuan (US$300)," Yan said. "Some residents sold their houses at a price of 1,700 yuan (US$205) per square meter.

The real estate company said it had to stop the project after the accident because of lack of capital.

The company asked an assessment company to evaluate the damage and loss. Based on the assessment, the company asked for the compensation sum, which included the affected business, interests of the loan and the input that did not get a return.

However, Korean Air raised doubts on the evaluation work, and insisted that the plaintiff should provide detailed information on the loss.

"I should know what was damaged, and how much damage, which constitutes the basis of the compensation," said Jiang Xian, from the city's United Law Firm, representing Korean Air.

Immediately after the crash, through negotiations and lawsuits, Korean Air offered compensation to the injured, five of the dead and 37 families from the quarters.

(China Daily April 6, 2002)

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