Arbitration Panel Sides with Lockheed in SES Dispute

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PARIS — Lockheed Martin Space Systems has won an arbitration dispute with satellite fleet operator SES of Luxembourg over a Lockheed-built commercial telecommunications satellite with a slight antenna anomaly, SES said Sept. 22.

The dispute arose when SES discovered that one of its Lockheed-built A2100 satellites in orbit could not receive uplinks at the edge of one of the satellite’s beams. SES had said the defect prevented the satellite from meeting contracted performance specifications, and that it would withhold a portion of orbital incentive payments to Lockheed as a result.

According to SES, Sunnyvale, Calif.-based Lockheed countered that SES never intended to use the beam’s uplink capability in this way, and so the performance incentive should be paid in full.

“We lost in binding arbitration and we have settled the matter,” SES said. “It is now closed.”

Satellite builders and owners often include in their contracts that in the event of a dispute, both sides will submit to the judgment of an arbitration panel and agree that the panel’s decision will not be appealed.

SES declined to disclose the size of the orbital incentive payment, but one industry official said it was around $10 million.