ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Thursday, June 7, 2012

Space Suit reports that satellite fleet operator MEASAT Satellite Systems of Malaysia (MEASAT) is suing fleet operator Intelsat Corporation (Intelsat) for at least $29 million in a U.S. District Court, alleging breach of contract and collusion in Intelsat’s handling of the launch of a Measat satellite in 2009. 

ConstellationGPSThe lawsuit, filed on April 27, 2012, in the United States District Court, Central District of California, is really two lawsuits in one.  MEASAT is after Intelsat for breach of contract in connection with two different planned launches of the same MEASAT sattelite. MEASAT contends that the parties entered in to an agreement on March 9, 2006, in which MEASAT agreed to pay over $40 million, and Intelsat agreed to launch MEASAT's satellite between November 1, 2007 and Janury 29, 2008.  For reasons that are unclear from the complaint, the parties agreed to delay the launch until August 2008.

The scheduled launch on August 21, 2008, was allegedly delayed due to Intelsat's repeated mishandling of the satellite -- first by hitting it with a crane and then by dropping it while it was being loaded onto a cargo plane.  In order to secure a second launch date, MEASAT alleges that it had to pay additional fees and also agree to waive any claims associated with the aforementioned breaches and/or negligence on Intelsat's part.  MEASAT alleges that the delays caused by Intelsat's mishandling of its satellite it "was fast losing millions of dollars and valuable good will" and was "teetering on financial disaster." 

The parties agreed to a June 2009 launch date, but Intelsat contniued to seek additional compensation, now reducing its demand to $7.5 million.  Intelsat also allegedly demanded that MEASAT sign a release, abandoning all claims associated with the earlier launch date and also threatened to use the launch to send up one of its own satellites instead of MEASAT's satellite, if its demands were not met.  At that point, it would have cost MEASAT between $80 and $90 million to negotiate an alternative launch.  As MEASAT would not have survived had it chosen to do so, it capitulated to Intelsat's demands.  The MEASAT Satellite was launched on June 21, 2009, over ten months from the previously scheduled launch date and eighteen to twenty months from the first promised launch period.          

MEASAT now alleges that Intelsat conspired with other entities to "facilitate the coercive and wrongful conduct" alleged in the complaint.  MEASAT is claiming that Intelsat breached its contract w/ MEASAT by demanding payments for launch in addition to the agreed-upon $40 million fee and through failures to exercise care that resulted in dealys in the launch. 

In addition, MEASAT has alleged claims for economic duress, unjust enrichment, breach of the convent of good faith and fair dealing, and a violation of California Business and Professions Code §17200.  MEASAT seeks damages in the amount of $29,000,000 as well as punitive damages and attorneys fees.

[Christina Phillips and JT]

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