"From our point of view, the dispute has been resolved and there are no legal or practical barriers against the company from taking part in Turkish contracts," Murad Bayar, head of the Turkish Undersecretariat for Defense Industries, told the Turkish English-language newspaper Hurriyet Daily News & Economic Review.

A court forced MBDA, owned by European Aeronautic Defense and Space Co., Britain's BAE Systems and Italy's Finmeccanica, to refund Turkey with $150 million for overcharging for anti-tank missiles it delivered to the country's armed forces.

The company paid the sum late last year and was recently removed from the black list.

This means that Eurosam, a company owned 66 percent by MBDA and 33 percent by France's Thales, is free to enter the bidding race for a multi-billion contract for long-range air defense systems.

The company, with its Aster 30 surface-to-air missile system, is expected to win the contract over competitors including the United States' Lockheed Martin and Raytheon and their Patriot Advanced Capability-3 systems; China's CPMIEC and its HQ-9, and Russia's Rosoboronexport and the S300.

The legal row with Turkey had barred MBDA from entering the competition.

The conflict started in 2004, when Turkey canceled a contract for the delivery of nearly 19,000 anti-tank missiles for a price of around $540 million. Ankara cited delays, operational problems and a bill of $380 million for just 3,700 missiles.

While Ankara said the price tag was artificially bloated and demanded a reimbursement of more than $200 million, MBDA contested that it had invested in a production plant in Turkey and that this investment should be deducted from the reimbursement.

At Geneva's International Court of Arbitration of the International Chamber of Commerce, Ankara won a court ruling that forced MBDA to pay Ankara $150 million. The payment of the fine ended the conflict between the missile maker and Turkey.

Meanwhile, MBDA is having trouble with ballooning costs related to another defense program.

The MEADS missile system, developed in cooperation with U.S. Lockheed Martin and Italy's Alenia Marconi system, is becoming much more expensive than planned, German business daily Handelsblatt reported earlier this month.

Total costs for the Medium Extended Air Defense System, currently being tested by the German armed forces, are expected to increase from $4 billion to $6.8 billion, the newspaper said.

MEADS is developed to replace the aging Patriot and Nike Hercules missile systems through a NATO-managed development. France, though initially in the project, withdrew early on to produce its own system, called PAAMS.

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