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Terma Files Breach of Contract Lawsuit Against Poland's Armaments Inspectorate

Feb. 18, 2014 - 08:58PM   |  
By GERARD O’DWYER   |   Comments
A dispute over aircraft survivability equipment for Polish Mi-17 and Mi-24 helicopters (Indian Mi-17 pictured) has led to legal action.
A dispute over aircraft survivability equipment for Polish Mi-17 and Mi-24 helicopters (Indian Mi-17 pictured) has led to legal action. (Agence France-Presse)
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HELSINKI — Terma A/S has filed a breach of contract lawsuit against Poland’s Armaments Inspectorate in the lower Polish court relating to a $30 million deal secured by the Danish electronics warfare defense specialist in 2010.

The order centered on the supply of Terma’s aircraft survivability equipment for seven Polish Mi-17 and 15 Mi-24 helicopters being upgraded at the time for operations in Afghanistan.

“We received the contract in July 2010 in response to an urgent operational requirement from Polish defense. The scheduled lead-in time was very short, but as a company we have 30 years experience in this field and are used to that. We have fulfilled deliveries at short notice many times before, including the delivery of EW equipment to Danish, British, Dutch and American aircraft,” said Steen Lynenskjold, senior vice president and head of Terma’s Defense and Security division.

The decision to terminate its contract and bring the lawsuit against the Polish Ministry of National Defense (PMND) was not taken lightly, and only after all other avenues, including mediation, were pursued, he said.

“Delivering defense equipment is our business. Being in the courts is not where we want to be. We have gone through government and military channels in Denmark in an effort to reach out to Polish defense, but we have been unsuccessful. We would still like to resolve this without recourse to the courts,” Lynenskjold said.

The PMDN did not reply to several requests by Defense News for comment on the lawsuit.

The dispute relates to the areas of false alarms and the testing of the system. All other aspects of the order were agreed upon, said Lynenskjold.

“We offered proposals to resolve the issues in dispute using best practice based on similar projects with other customers. We still could not find agreement, even though we tried all avenues to find a solution.

“IU [the inspectorate] and Terma interpret the contractual requirement on false alarms very differently. It [IU] has not been willing to accept the commonly used de-facto standards to such tests based on the extensive experience Terma has with similar deliveries to allied partners. Taking this legal action has been considered very thoroughly and is regarded as a last resort by Terma,” Lynenskjold said.

The impasse and PMND’s refusal to accept delivery means that the survivability equipment, which is based on Terma’s AN/ALQ-213 controller EW Management System, is sitting in crates in the company’s factories, said Lynenskjold.

Terma’s equipment have been installed on more than 2,108 fighter, transport and rotary wing aircraft in 20 NATO and alliance partner countries. The ALQ-213 controller is able to control and integrate any combination of sensors and countermeasures systems on any type of aircraft, and make these subsystems work as one integrated system, he said.

The self-protection system provided to Poland can be used against heat-seeking missiles and improve the pilot’s situational awareness. The system is fielded on AH-64D, CH-47D/F, AS-532, EH-101 and H-60G helicopters; F-16A/B and C/D model fighters; C-130H and J model transport planes; and the Harrier GR9 and Tornado aircraft.

The contract reached by Terma with the PMND in 2010 included the delivery of electronics and aerostructures as well as test, approval and certification of the completed helicopters, and training of 250 Polish defense industry employees in use and maintenance of the equipment.

The $30 million contract was Terma’s latest major order from Poland in recent years. In 2007, the company’s Radar System’s division delivered 19 radar systems to the Polish Border Control for the surveillance of the country’s Baltic coast. ■

Email: godwyer@defensenews.com.

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