Posted: Mon, Sep 13, 2004, 8:45 AM ET (1245 GMT)
A group of satellite insurers have started legal action against Boeing Satellite Systems, claiming company negligence led to defects that generated over $1 billion in insurance claims. The Wall Street Journal reported Monday that the insurers have filed an arbitration request with the International Chamber of Commerce, seeking $250 million in damages from Boeing. The insurers claim that Boeing failed to properly test solar concentrators on the company's new Boeing 702 line of spacecraft. The concentrators degraded once in space, reducing the power available to the spacecraft and shortening their lifetime. The problems, which affected the first six 702 spacecraft, resulted in $1.6 billion in claims, which have been settled by insurers for roughly 50 cents on the dollar. The arbitration filing made by insurers deals with one of those satellites, Thuraya 1. Space News reported last week that the arbitration will be handled under Abu Dhabi law, where Thuraya is headquartered. Such legal action by satellite insurers is unusual; disputes between insurers and manufacturers are usually handled out of court.

Related Links:

•  Wall Street Journal article (subscription required)
•  Space News article (subscription required)
•  Reuters article