Sky settles EDS lawsuit for £318 million

Following lengthy litigation, Electronic Data Systems (EDS) – a subsidiary of Hewlett Packard Co. – has agreed to pay British Sky Broadcasting (BSkyB) a total of £318 million as part of a settlement deal.

The lawsuit relates to a £48 million contract between the two companies issued around ten years ago, relating to the building of a new customer relationship management system. The case has dragged on for years, most likely costing both companies’ professional indemnity insurance a considerable amount in litigation fees.

BSkyB stated in an earlier lawsuit – heard in January 2010, ruling in favour of Sky – that they ended the contract in 2002 after EDS put in a “woeful performance”, claiming the company misrepresented itself in terms of its abilities and won the contract fraudulently. As HP only took over EDS in 2008, they claimed it was a “legacy issue” they had inherited from the company’s previous owners.

Sky were originally seeking around £700 million, but after long-running negotiations have been awarded a final settlement of £318 million. This includes legal costs and damages as well as an interim payment of £270 million made by HP in February.

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