Product details

Nationwide VSAT (very small aperture terminal) Project presents to Brian Smith, Chief Executive Officer (CEO) of SpaceConnect, an information technology company in Riveria a real challenge of contract enforcement in recovering over US$3million in claims against Nationwide Operating and Management Company (NOM). SpaceConnect finds itself in a dire financial situation resulting from failings by its customer NOM to honour payment obligations under a VSAT procurement, installation, and maintenance contract signed between it and NOM. The financial problem results remotely from the agreed structural and financial model for the contract in the socio-political and economic environment of business in Riveria. The case presents issues of due diligence in: (1) commercial transactions; (2) licensing issues; (3) impact of constitutional issues on commerce; (4) legal and regulatory aspects of business; (5) contracts; (6) dispute resolution and conflicts of interest; and (7) throws up the challenges of joint financing of projects, supported with limited guarantees and impact on parties. SpaceConnect and NOM had agreed that the installation of the VSAT Network for the lottery project would be jointly financed by both parties in return for a seven year contract for SpaceConnect. The contract was initially backed by an offshore guarantee for 3 months. On expiration of the guarantee, coupled with a cost-plus model of invoicing, the parties began to encounter challenges that tested their survival and business sustainability. The initial diligence had predicted resistance to the project by the provincial government. This further complicated the situation, with SpaceConnect filing an arbitration claim against NOM, as well as initiating proceedings in court, and complaints before the financial crimes commission.