Advanced Television

Inmarsat wins major arbitration award

December 5, 2018

Speciality services provider RigNet, which supplies telecoms connectivity to oil rig crews, VSAT customers, mobile connectivity and wireless broadband, has suffered a significant set-back in a dispute with Inmarsat. The arbitration has been heard at the  International Centre for Dispute Resolution.

The dispute is centred on a $65 million “strategic” capacity lease in 2014 for 7 years by Houston-based RigNet on Inmarsat’s Global Xpress satellite fleet. RigNet’s argument, in essence, is that it correctly gave Inmarsat a notice of termination. “The parties are attempting to resolve the GX dispute through a contractually stipulated arbitration process that began in October 2016,” RigNet wrote at the time. “The parties dispute whether Inmarsat has met its contractual obligations with respect to the service under the agreement,” said RigNet.

Inmarsat says the dispute follows RigNet’s failure to deliver on its ‘Take or Pay’ agreement.

Phase 1 of the arbitration dispute between the parties has determined that RigNet owes Inmarsat $50.8 million. However, Phase II of the proceedings will not be resolved until June next year and where RigNet will make their counter-claims against Inmarsat, and where the amount awarded could be reduced.

RigNet has notified shareholders that this is an interim ruling, and RigNet is not required to pay any amounts to Inmarsat until the panel rules on Phase II counterclaims. 

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