Raytheon [RTN] on Friday said it has amicably settled a five-year-old dispute with the United Kingdom Home Office related to the agency’s termination of a border security program the company had been delivering for Britain.
The $223 million cash settlement in favor of Raytheon is less than the $392 million that a British arbitration ruled for in favor of the company last August (Defense Daily, Aug. 18, 2014).
The Arbitration Tribunal said at the time that the U.K. Home Office had unlawfully terminated the eBorders contract and had awarded Raytheon Systems Limited (RSL) $392 million for damages and the agency’s wrongful retention of funds, although it reserved its decision on the costs.
The U.K. Home Office challenged the Tribunal’s decision, which last month was partially overturned by a judge of the London High Court, although the judge stayed his position and allowed both parties to appeal, which RSL did.
However, Raytheon said it decided to settle to “avoid further uncertainty and the expense of more protracted litigation, and to strengthen their important customer relationship with the British government.” Raytheon also said that throughout the dispute it has continued to serve its customers in the British government on defense, national security and commercial projects.
“This settlement represents a significant reduction on the original award” and “avoids any further payments or liabilities for the assets which were transferred to the Home Office, including capabilities which enhance national security by allowing the collection of advanced passenger information for checking against criminal and terrorist watchlists, as well as for the cost of contract change notices, interest payments, costs, the 50 million pounds in letters of credit and any other claims,” Home Office Secretary Theresa May said in a statement.
Raytheon said the settlement resolves the claims and counterclaims of both parties.
Raytheon won the potential $1.3 billion eBorders program in 2007. The company’s solution allows U.K. authorities to do watchlist checks of persons entering or exiting the country by air, sea or rail before boarding.