BSkyB takes on IT giant in court battle

BSkyB has begun a court battle with IT giant Electronic Data Systems (EDS) over a failed contract for a customer care centre.

The broadcaster is claiming £709m damages in relation to a contract agreed in 2000 for EDS to set up the "world class" call centre.

When it launched the idea Sky hailed it as a major project to bring new customers, monitor subscribers’ needs and improve customer services.

The announcement prompted a share-price rise but now investors' confidence in both companies could be affected.

Sky says it was ready and wanted the centre to be provided quickly when it agreed the deal. It alleges EDS was dishonest in saying it had the resources and ability to start work immediately.

In papers submitted to London's specialist technology and construction court, it says:
"EDS knew that timing was important to Sky so represented that their resources were reserved for the project and ready to start ‘now’.

"It was a calculated and dishonest play to secure the contact. The strategy succeeded."

EDS pulled out of the contract fully, after successive problems and set-backs, in 2003.

However, lawyers for EDS are due to argue that Sky did not know what it wanted and caused the problems with its uncertainty.

They will point out that it eventually took six years and more than £265m to complete.

Sky's figure of £709m damages, it says, comes from lost business benefits and the difference between the eventual cost and what it would have been if a rival contract won.