August 20, 2014 -
U.S. defense contractor Raytheon Co has been awarded about £224 million in damages after a UK arbitration tribunal found that the British government unlawfully ended a £750 million eBorders contract with the company in 2010, according to a report by the BBC.
eBorders was a border-control program designed to thwart terrorism by gathering advance data on passengers travelling to the UK.
Raytheon first signed a nine-year contract in 2007 with the previous UK Labor government, but it was cancelled within a few months of its successors coming into power in 2010 over concerns that Raytheon was running a year behind schedule.
The government also said that it was unsure of Raytheon’s ability to deliver the database that provides the foundation for the system.
Raytheon later threatened to sue the government for £500 million in damages, arguing it had met the obligations stated in the contract and was not responsible for the time delays.
The arbitration tribunal condemned the UK Border Agency for not informing its political superiors of Raytheon’s claims that government officials were partially responsible for the default.
According to its release, Raytheon said the arbitration tribunal turned down Home Office claims for damages of previous payments made to Raytheon Systems Ltd., and that the Home Office had wrongfully held on to the £50 million it had drawn on Raytheon letters of credit in April 2011.
The arbitration tribunal did not rule on the cost and interest payable to Raytheon as a result of this wrongdoing, said Raytheon.
“The Tribunal’s ruling confirms that RSL delivered substantial capabilities to the UK Home Office under the eBorders programme,” Raytheon said in a statement. “Raytheon remains committed to partnering with the UK Government on key defence, national security and commercial pursuits.”