HP to appeal over potentially massive BSkyB ruling

Judge delivers verdict in '£700m' contract case

BSkyB has claimed victory in its long-running contract dispute with EDS, the services giant now owned by HP.

A ruling was delivered to the firms today, and it is believed that the ruling accepts one of BSkyB's five claims, while rejecting the other four.

However, British TV firm BSkyB sees this as a vindication of its claims, and the company reportedly expects to receive in excess of £200m when damages are assessed at a hearing next month.

HP has said it intends to appeal the ruling.

The firms fell out over the customer management system deal, inked in 2000, which was meant to cost the broadcaster £48m. The installation eventually took six years to complete and cost £265m. BSkyB and EDS parted company in 2002.

BSkyB had claimed EDS had secured the deal fraudulently - specifically on the issue of liabilities - and failed to deliver on its promises. It originally claimed £700m from EDS, which was taken over by HP in the first half of the 2000s.

HP argued during the trial that the contract had always been problematic and broadcaster had constantly changed the specs on the deal. It also argued that with tens of people working on the bid, it was inconceivable that any individual could have fraudulently influenced the deal.

HP said in a statement: “This is a legacy issue, dating back to the EDS business in 2000, which HP inherited when it acquired EDS in 2008.  We are pleased the Court dismissed the majority of the allegations made.   While we accept that the contract was problematic, HP strongly maintains EDS did nothing to deceive BSkyB.  HP will be seeking permission to appeal.

"As the world’s largest technology company, HP has built a solid reputation based on strong governance and adherence to the highest ethical standards.”

BSkyB said: "Mr Justice Ramsey found that EDS had lied to Sky in order to secure a contract as part of the company’s investment in a new customer relationship management system.

It added: "Sky anticipates that EDS will be liable to pay Sky an amount of at least £200m."

The case is thought to be the most expensive in British legal history. Hearings ended in 2008. The judgement runs to more than 500 pages, and is expected to be released tomorrow.®