SES unseals Court docs for April 19 hearing
April 12, 2022
Lawyers for SES in its action against Intelsat over the division of C-band proceeds, have unsealed 142 pages of evidence, many of which had previously redacted segments. The document, filed last week and now in the public domain, goes into considerable detail over the $9.7 billion (€8.9bn) in Accelerated Relocation Payments from the FCC. SES is claiming that a 50/50 agreement between SES and Intelsat must be honoured.
The document presents SES’s evidence and its claimed ‘Findings of Fact’ for the Court’s benefit. The Court will open its hearings on April 19th into the claimed ‘Findings of Fact’.
SES is arguing that Intelsat is in Breach of Contract and that the C-Band Alliance’s core agreement is valid and “prohibits either party from withdrawing from or terminating the partnership based on an adverse FCC order unless both parties agree to terminate the Agreement.”
SES is also arguing that Intelsat has engaged in “unjust enrichment” saying: “Intelsat was aware that SES had leverage to insist on a 50/50 split, both at the beginning of the parties’ partnership and in the weeks leading up to the release of the FCC’s draft order. Intelsat also was aware that it needed SES’s continued partnership, even more so after the FCC announced that it would run a public auction, to present a unified negotiating front to the FCC and secure a deal for the highest amount of Accelerated Relocation Payments possible.”
The document alleges that Intelsat “induced SES” and used SES to extract a benefit from the FCC.
Indeed, SES had in 2012 declined to participate in a similar proposal in view of the perceived risks, and that the risks in 2017 [when the suggestion re-emerged] was “even higher”. The filing states: “In light of these risks and SES’s risk tolerance, SES was willing to consider a partnership only on the condition that Intelsat agreed to ‘a pure, simple, unconditional 50/50 [split] of the proceeds.’”
The SES document quotes evidence submitted to the Court and that CEO Steve Collar’s contemporaneous handwritten notes taken at a February 5th celebratory dinner at Eddie V’s steakhouse in the Intelsat building, and subsequent phone calls where the 50/50 was again discussed. SES alleges that Intelsat’s Board “behind the scenes” had already determined not to honour the 50/50 agreement.
On February 6th the FCC announced the $9.7 billion in total C-band payments and the division of allocated cash was leaked with Intelsat getting 50.02 per cent (worth $4.85 billion) while SES would get 41.15 per cent (worth $3.99 billion). SES is arguing that its ‘missing’ $420.8 million must be paid.
SES argues that under New York law it is “entitled to recover from Intelsat for reneging on its
promise to share the proceeds of their partnership 50/50” and under its breach of contract claim against Intelsat. SES argues that Intelsat’s central defences are self-contradictory. Its filing states: “to defeat SES’s unjust enrichment claim, Intelsat claims the Agreement was broad enough to remain in effect until February 7, 2020, long after the parties knew the FCC had rejected their original market-based approach in favor of a public auction. Intelsat cannot have it both ways—either the Agreement governed the parties’ conduct (and SES’s contract claim may proceed), or it did not (and SES’s unjust-enrichment claim may proceed).”