Clifford Chance advises as defence company sues Government for £500m

Clifford Chance has scooped an instruction from US defence company Raytheon, which has lodged claims worth £500m against the Government for axing a computer systems contract.

Partner Rob Lambert is acting for Raytheon in arbitration proceedings between the company and Home Secretary Theresa May that follow on from the Government terminating Raytheon’s contract on the ‘e-Borders’ project. The project was set up by the Labour Government to monitor the number of people coming in and out of the UK.

In a letter to Home Affairs Select Committee chair Keith Vaz MP, published by the committee today, Raytheon UK chief executive Robert Delorge said the company was in arbitration with the Home Secretary over the termination.

Delorge said the company had been told that the contract had been terminated “on the grounds that Raytheon was allegedly in material default of its contractual obligations”.

He added: “We vigorously refute that contention. We maintain that the purported termination was unlawful and that Raytheon is entitled to recover substantial damages for wrongful termination. We have made counterclaims in the arbitration in excess of £500m in respect of these matters.”

Raytheon was replaced on the e-Borders project by IBM and Serco. A letter to Vaz from Damian Green MP on behalf of the Home Secretary said the companies were currently meeting or exceeding their contractual target requirements.