ATK says no arbitration in HK Army ‘Punisher’ contract breach suit

06/26/17 12:12 PM | by

A U.S. Army acquisitions representative looks through the scope of the XM25 shoulder-fired 25mm airburst grenade system, dubbed “the Punisher.” (Photo: Defense Review)

A U.S. Army acquisitions representative looks through the scope of the XM25 shoulder-fired 25mm airburst grenade system, dubbed “the Punisher.” (Photo: Defense Review)

A U.S. Army acquisitions representative looks through the scope of the XM25 shoulder-fired 25mm airburst grenade system, dubbed “the Punisher.” (Photo: Defense Review)

Aerospace and defense contractor Orbital ATK on Thursday opposed a request from gun maker Heckler & Koch to dismiss a breach of contract suit filed in by the former, who argued the gun maker violated the terms of a $35 million supply agreement.

HK filed the request in a Minnesota court last month, holding up a “teaming agreement,” which the two parties signed concurring to settle any dispute privately through arbitration. ATK argued the dispute in question was over a multi-million dollar subcontract that is separate from the teaming agreement, which does not have an arbitration clause, according to court documents.

Further, ATK argues, the teaming agreement’s arbitration clause “specifically exclude[es] Subcontract Disputes,” according to court documents.

The dispute in question is over HK’s failure to fulfill its agreed contract to supply the U.S. Army with a shoulder-fired 25mm airburst grenade system dubbed “the Punisher.”    

ATK claimed HK prematurely pulled out of the $35 million agreement to supply the “XM25 Counter-Defilade Target Engagement System,” which can read the distance between the operator and an enemy in a fortified position, according to the complaint filed in January.

To sidestep ATK’s breach-of-contract claim, HK used the St. Petersburg Declaration of 1868, a treaty banning the use of certain projectiles against people. The provision bears resemblance to the principals held in the 1973 Geneva Conventions, which cite the 150-year-old St. Petersburg clause banning the employment of “any projectile of a weight below 400 grammes” or just over 14 ounces against any person.

“HK obtained a legal opinion from a German lawyer positing that the XM25, as designed, could theoretically be used in a manner that violated international laws of war,” the complaint says.

ATK claims the XM25 wouldn’t be used against enemy combatants who aren’t seeking cover behind a fortified position, so the St. Petersburg Declaration doesn’t apply.     

It was because HK breached the subcontract that ATK was unable to deliver the 20 units to the Army on time that the military terminated its contract with ATK in April, the defense contractor argued.

After extensive negotiation efforts, the contractor failed to come up with an acceptable alternative resolution, Army spokesman said in an email to Military.com last month.

ATK claims the German gunmaker caused direct damages of more than $27 million, including “the costs of re-procurement, consideration required by the U.S. Government in exchange for the schedule extension required as a result of HK’s breaches of contract, lost profits” and other associated costs.

Latest Reviews

  • Aguila 5mm Ammo Breathes New Life into Forgotten Plinkers (VIDEO)

    Thanks to Aguila and a revitalized interest in longer-range rimfire shooting, 40-year-old Remington 591 and 592 rifles are gaining popularity.

    Read Now
  • gun safe, safetech

    SnapSafe Treklite Serves Safe Gun Storage on the Go

    Billed as a means to easily carry a gun on the go, the SnapSafe TrekLite appears, on the surface, to...

    Read Now
  • dd5v1

    Gun Review: Daniel Defense DD5V1 rifle in .308 (VIDEO)

    Unlike Daniel Defense’s standard-fare – AR-15s chambered in 5.56 – the DD5V1 is an AR-10 chambered in .308. Guns.com checks...

    Read Now
  • Rex vs Canik

    Gun Review: Rex Zero 1 vs Canik TP9 Elite Combat (VIDEO)

    Two pistols that come with everything but the kitchen sink are FIME Group's Rex Zero 1 Tactical and Canik TP9...

    Read Now