Case Reports

BSkyB Limited v HP Enterprise Services Limited [2010] EWHC 86 (TCC)

The decision in BSkyB Limited–v- HP Enterprise Services UK (fomerly Electronic Data System Ltd [2010] EWHC 86 (TCC)) could have serious implications in relation to pre-contract negotiations and the ultility of contractual limitation of liability clauses. The Claimants in the proceedings, British Sky Broadcasting Limited and Sky Subscribers Services Limited (“BSkyB””) provided satellite broadcasting and related services. The Defendants, Electronic Data Systems Limited (now HP Enterprise Services UK Limited) and Electronic Data Systems Corporation (now Electronic Data Systems LLC) (“EDS”) provided Information Technology services. The case concerned the procurement of a customer relationship management (“CRM”) system.

Following a tender process in 2000, BSkyB selected EDS to design, build, manage, implement and integrate the process and technology for the CRM System. In 2008 HP Enterprise Services aquired EDS. The project was problemantic, and in 2002 BSkyB took over the performance of EDS’ role of Systems Integrator. BSkyB alleged, among other things, that EDS made fraudulent misrepresentations which led to EDS being selected.

Initially the CRM Project was to go live on 31 July 2001 and be completed by 1 March 2002 at a budget of £47.6m. BSkyB claimed that the functionality for the CRM System was only completed in March 2006 at a cost of about £265m. In the Particulars of Claim, as they stood at the commencement of the hearing, Sky claimed damages of £709m.

The contract included a £30m limitation of liability clause.

The case was heard over a period of 10 months, where there were 109 hearing days. It took some 18 months, following the conclusion of the hearing, before Judgment (468 pages).

The Court ruled, among other things, that Electronic Data Systems Ltd misrepresented its capabilities when bidding for and selling the CRM system to BSkyB. There remain oustanding issues as to quantum, however HP was ordered to pay an interim amount of £200m. EDS is seeking permission to appeal the decision.