London court orders Hughes to pay Subhash Chandra $58 million

(Posted on 8 May, 7:30 pm)

After a long while, a court in the UK has provided some good news for media baron Subhash Chandra.

The Chandra promoted company Afro Asian Satellite Communications Gibraltar (AASCG) Ltd has won a five-year-long legal battle against Hughes Space and Communications International over a cancelled satellite contract.

The London Court of International Arbitration, in a ruling on 11 April, ordered Hughes to pay $38 million to AASCG plus up to $20 million in interest as well as court costs, the figure to be decided at a future date, the 30 April issue of Space News has reported.

Hughes Space and Communications International is part of Hughes Electronics Corporation's satellite manufacturing arm, which was sold to Seattle-based Boeing Co last year.

AASCG and Hughes signed a $700-million contract in January 1995 for two large mobile-telephone satellites that AASCG was planning as part of its Agrani project. AASCG made an initial payment of $38 million to Hughes as part of the contract. But in late 1996, Hughes stopped work on Agrani, saying that the project's backers were unable to finance further work.

But AASCG argued that Hughes stopped work on Agrani because of its greater interest in a contract with the Asia-Pacific Mobile Telecommunications (APMT) consortium of Singapore, a Chinese-backed concern that was planning a similar satellite system over East Asia.

For the US satellite maker, the AASCG-APMT episode has proved a costly one. In addition to losing the AASCG contract and being forced to reimburse the company with interest, Hughes was barred by the US government from shipping the APMT satellite due to technology transfer concerns. Hughes subsequently paid APMT a contract cancellation fee.

 

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