Indian American company sues U.S. defence firm

Friday, 28 February 2003, 08:00 Hrs
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An Indian American-owned firm has sued a U.S. defence company over alleged breach of contract in a deal for the sale of weapons-locating radars to the Indian government.

WASHINGTON: Arlington, Virginia-based defence contractor Apex Technology (APEX) has initiated proceedings against Thales Raytheon Systems (TRS) of Fullerton, California.
APEX has charged TRS with "breach of implied obligation of good faith and fair dealing, fraud and negligent misrepresentation".

The radars, which were the subject of a Teaming Agreement, are to be placed on the Jammu and Kashmir border to protect Indian soldiers and civilians from hostile artillery, according to an APEX press statement released Thursday.

The Teaming Agreement recognised that APEX would handle all of the crucial fieldwork in India that led to the approval of the sale by the U.S. government to India under the U.S. Defence Department sponsored Mentor-Protégé programme.

APEX said its president P.B. Ram Reddy and members of his staff made extensive efforts to market the radar, including many visits to India to meet government officials, continuous correspondence and discussions to maintain India's interest in TRS' radars, and engaging in extensive advocacy of the U.S. Congress to lift sanctions that blocked the sale of the crucial weaponry to India.

APEX undertook all of this effort at its own time and expense as a team member.

India approved the purchase of eight "Firefinder" radars with an option for four more from the U.S. government in April 2002 for a total cost of $146 million for eight, with additional sales of radars contemplated in the future.

Under the express terms of the Teaming Agreement, TRS was required to offer a subcontract to APEX to furnish certain items and services to TRS in the U.S. and India in connection with Delivery Orders issued by the U.S. government to TRS.

TRS has refused to offer or negotiate the subcontract and refused to pay APEX or its Indian subsidiary a commission on the sale as contemplated by the parties.

TRS is equally owned by global defence giants Raytheon Company and Thales S.A.

"This is a direct violation of a valid contract. TRS is refusing to meet its clear obligations to a small minority-owned business - one that was instrumental in securing the overall contract for TRS," said Mickey Kantor, a former Clinton administration official who now works for law firm Mayer, Brown, Rowe & Maw.

"Allowing TRS to ignore the Teaming Agreement would jeopardise the future viability of not only APEX, but other small defence contractors who must rely on these types of agreements," according to Kantor, who now represents APEX.

Kantor has served as commerce secretary and U.S. trade representative.

Reddy said: "I operate a small business that provides engineering services to large defence contractors and the U.S. government.

"Much of the work and the use of my expertise and contacts in India are provided prior to the awarding of an actual contract. A Teaming Agreement is supposed to protect my company's rights as a small contractor and provide my company with the compensation that we are entitled to in the executing of the ultimate contract.

"In the case of the TRS "Firefinder" radars project, I have been completely cut out of the deal and will not receive the compensation or a subcontract that I am entitled to. This sale could not have been completed without the work of APEX for seven years and I plan to fight for my rights as a small businessman."
Source: IANS

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