Update on Sea Launch Failure Litigation
In January, after a failed attempt to launch a Sea Launch ocean platform-based rocket, Boeing sued its Russian and Ukrainian partners for breach of contract. Sea Launch utilizes a mobile sea platform, which can be maneuvered along the Pacific Ocean equator. The goal is to position the platform at the optimum geographic launch point for the particular spacecraft’s flight plan, orbit, etc.
Boeing’s suit was filed against a Ukrainian based aerospace design company, as well as Energia, an aerospace manufacturer allegedly owned and controlled by the Russian Federation. Boeing’s complaint alleges that, following the alleged “failure” of the project, the defendants failed to honor their contractual agreement to reimburse Boeing for its investment in the venture. The federal complaint suggests that the defendants were not disputing the debt, but were instead attempting to “stall and evade, forcing Plaintiffs to chase them around the world to secure payment of debts clearly owed”.
Energia has now responded to the suit, having filed a complex Motion to Dismiss the case. The motion first claims that Energia is not, in fact, controlled by the Russian Federation, given that only 38% of the company is owned by the Federation.
Energia has asserted three defenses to the suit:
1. It claims that the case should be dismissed for forum non conveniens. This is a very common defense to lawsuits, in which the company being sued argues that the court should dismiss a case because another court (typically in another state or country) is better suited to hear it. Energia claims that the Los Angeles federal judge should dismiss the case because the United Kingdom is a more convenient forum. It claims that its contract with Boeing contains a “forum selection clause”, in which the parties agreed that all disputes between them should be litigated in the UK.
2. It claims that the court should stay the case because the parties are currently engaged in a Swedish arbitration proceeding over the Sea Launch dispute, in which Boeing is making claims similar to those in the lawsuit.
3. It claims that the court lacks subject matter jurisdiction over it.
Boeing has filed an opposition to the motion to dismiss, and the court will likely rule on the case within a few months. While the motions refer to exotic locations and arcane legal terms, the issues really are not complicated. Basically, the court must decide (1) whether the UK is a more convenient place for the suit to be brought and (2) whether the Swedish arbitration panel is in a position to rule on the disputes between Boeing and the defendants.
THE LAW OFFICE OF PHIL GRIFFIS