Measat sues Intelsat alleging “collusion”
May 16, 2012
Malaysia’s Measat satellite operator is suing Intelsat for some $29 million in a Californian court. Measat is alleging breach of contract and collusion over the handling of the launch of a Measat satellite in 2009.
The writ’s details, contained in Case Number VC12-03702 (MEASAT Satellite Systems BHD against Intelsat Corp) – concerns damage done to the satellite when it was been moved at Baikonur and cranes that were moving the craft damaged the satellite. The legal claim argues that Intelsat knowingly mishandled the contract in regard to the launch of Measat 3a by a Land Launch rocket from Baikonur in Kazakhstan. The documents allege that Intelsat did not exercise the same care in supervising the handling of the satellite as it would have done had it been its own craft.
The somewhat complex case goes back some years prior to Intelsat’s purchase of PanAmSat. PanAmSat had a number of launch contracts in place with Sea Launch and its ground-based counterpart Land Launch, and while Intelsat used some of these contracts for its own purposes it also sold one to Measat for $40.25 million.
Sea Launch itself had its own financial problems which started in late 2008, ending up in Chapter 11 bankruptcy. During this period there was serious doubt as to whether Sea Launch (or Land Launch) would emerge from bankruptcy protection. During this period it is claimed that Intelsat requested an additional $11 million from Measat in order to secure an early launch. The alternative was to re-enter the launch market and have to wait more than a year for a suitable launcher – and to pay more for the privilege.
That $11 million extra payment was eventually reduced to $7.5 million although Intelsat wanted the difference to be paid in Measat equity. Measat’s court documents say that it was itself under extreme financial pressure at the time and needed the satellite to be launched.
The damaged Measat-3a was eventually repaired at a cost – says Measat – of an extra $25 million, and successfully launched in June 2009.
Intelsat’s Dianne VanBeber reportedly says that the claim is being reviewed but that any litigation will not be material to Intelsat’s business.