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OneWeb responds to Virgin Orbit lawsuit

August 9, 2019

By Chris Forrester

Sir Richard Branson’s Virgin Orbit company is suing OneWeb for $46.5 million alleging that the satellite mega-constellation company has filed to pay agreed cancellation charges for orbiting some OneWeb satellites.

OneWeb had allegedly signed a contract with Virgin to use Branson’s business for 35 launch flights on its Virgin LauncherOne rocket. Virgin’s contract, signed in May 2015, apparently levied fees of $6 million for each launch.

Virgin, in its submission to US District Court for the Southern District of New York, claims the cancelled contract would deny it between $234-$834 million in revenues.

‘Not so’ implies OneWeb in its response, and explaining that a July 2017 contract amendment was specifically designed to keep the termination liability from increasing while the two parties attempted to negotiate further amendments to the launch service agreement. It argues that the modification, agreed by both parties, materially altered the payment due to Virgin if OneWeb terminated the launches without cause.

It is now accepted that the Virgin contract was extraordinarily generous, and OneWeb now says that Virgin was charging two to three times the market price.

OneWeb agrees that the termination triggered a $70 million fee, but that the amount was reduced because of previous payments made to Virgin. OneWeb had paid $66 million to Virgin.

The case continues.

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