CC, Freshfields left hanging by Galileo

Freshfields Bruckhaus Deringer and Clifford Chance have been left waiting in the wings while eight European companies fight over the E3.2bn (£2.21bn) Galileo project.

The consortium of companies, known as the Galileo Operating Company (GOC), has failed to instruct external legal counsel as questions surface about budget difficulties, timetables and satellite coverage for the project, which is designed to rival the US's Global Positioning System (GPS).

The GOC, headed by UK satellite navigation company Inmarsat, had beauty paraded Freshfields and Clifford Chance for the lucrative role ahead of the first round of negotiations in Brussels.

The Lawyer understands that Freshfields was favourite following the beauty parade, but neither firm has received instructions while the GOC negotiated with the public sector without external legal advice.

Lovells, with a project finance team led by partner Charles Robson, has been advising the Galileo Joint Undertaking (GJU), a public sector body jointly owned by the EU and the European Space Agency.

Sources close to the negotiations said the highly political process had caused infighting among GOC members, with a delay of naming counsel a direct result. And a deal between two consortium members, in which Thales purchased Alcatel's satellite operations, is understood to have caused further delays.

The GOC includes Aena, Alcatel, EADS Space Services, Finmeccanica, Hispasat, Inmarsat, Thales and TeleOp.