BSkyB $1.4bn ‘fraud’ trial ends

[SAT-WORLD]

Litigation between BSkyB and Texas-based software company EDS has been rumbling on for about four years. BSkyB is accusing EDS of “woefully…deceitfully ...and fraudulent breach of contract” for failing to fulfil its obligations under a contract agreed with Sky in 2000. BSkyB is suing EDS for £709m. The trial, which began almost a year ago, has just ended.

Back in October 2007 BSkyB said the trial was happening because EDS made fraudulent representations to secure a contract from BSkyB and failed to deliver its contractual obligations. The trial is important, not just because of the huge sums involved, but because it is likely to significantly affect case law in the UK.

Lawyers from Nabarro state that “[this case] could be the most important case yet for the IT services sector”. The judge in the trial is now contemplating his decision and verdict, which he will hand down sometime after Oct 1.

“BSkyB,” summarises Nabarro, “is claiming approximately £700m from EDS in damages in respect of a project to implement CRM (customer relationship management) software to run BSkyB's new contact centre. BSkyB claims that EDS's bid team made fraudulent misrepresentations in order to win the contract, notably that EDS had the capability to deliver BSkyB's project. BSkyB alleges (a) that EDS mismanaged its part in the project and (b) from this it must be inferred that the representation that EDS was capable of doing the job was untrue. BSkyB claims that because of the alleged fraud, the contractual limitations and exclusions of EDS's liability do not apply. EDS denies the allegations and attributes the project cost and time overruns to the undefined scope of BSkyB's requirements,” say the lawyers.

Nabarro says: “The judge may decide either (a) to uphold the former status quo – that fraud is a very serious allegation that needs very strong proof; or (b) to allow (in effect) careless statements, made in the heat of high-pressure, competitive bid situations to overturn agreed contract terms limiting and excluding liability.”



Source: Rapid TV News