EDS to counter-sue BSkyB in row over computer system

EDS is to counter-sue BSkyB after the satellite television group launched a lawsuit against the IT specialist alleging "deceit, negligent misrepresentation and breach of contract".

EDS is to counter-sue BSkyB after the satellite television group launched a lawsuit against the IT specialist alleging "deceit, negligent misrepresentation and breach of contract".

EDS said it would "vigorously defend" itself in court and seek "several million" from Sky to cover what it claimed were unpaid bills.

The case concerns a £60m contract awarded in 2000 to EDS, an IT specialist, to design, build and implement a customer service system at Sky's call centres in Livingston and Dunfermline, Scotland.

Sky alleges that EDS only landed the contract because of "fraudulent representations" it had made on what it would do and that EDS failed to meet contractual milestones.

The contract was terminated in 2002 - each side claims it ended the relationship.

EDS and Sky have been in negotiations to settle outstanding issues but Sky yesterday announced that it had filed a claim in court. Sky declined to put a figure on the damages it is seeking, saying it was a "material amount" for "failing to perform its contractual obligations". Sky is 35 per cent owned by News Corp, which also owns newspapers and television interests around the world, including The Sun and The Times.

Malcolm George, director of communications for EDS in the UK, confirmed that EDS would counter-sue.

He said: "This [lawsuit] is the behaviour we have been expecting in light of what we experienced in negotiations. We were told then [by the Sky side] 'do you know what it is like to litigate against a global media company'?"

A spokesman for Sky declined to respond.

EDS was brought in by Sky to build a computer system that its call-centre staff could use to deal with existing customers, including a customer database and billing system.

Sky took the development of its customer relationship management (CRM) infrastructure in-house. Sky has spent £170m on these systems - it now seeking to recover a part from EDS.

Earlier this month, as part of the new strategy announced by its chief executive, James Murdoch, Sky said it would invest a further £50m on the CRM system.