Home Office wins £224m e-Borders appeal

The Home Office has won its appeal against an order to pay £224m to a US defence firm over the cancellation of a secure borders contract.

A tribunal ruling ordering the payment to Raytheon was set aside by a judge.

The contract to deliver the e-Borders programme, launched by the previous Labour government, was cancelled by the coalition.

E-Borders was meant to collect details from passenger lists of all people entering and leaving the UK.

The original award, of £50m in damages plus other costs, was made by an arbitration tribunal in August.

Pinsent Masons, the law firm representing the Home Office, said the judge had found that the original award had been "tainted by serious irregularity so as to cause substantial injustice".

Raytheon, which was given a nine-year contract in 2007 to run the programme, said it contested the ruling and would be appealing to the Court of Appeal to recover money for the "wrongful termination" of the e-Borders contract.

A spokesman said: "It is a fundamental principle of international business that awards of arbitral tribunals are respected and enforced by national courts."

When it terminated the contract with Raytheon in 2010, the government said it had lost confidence in the firm's ability to deliver the programme after it fell a year behind schedule.

Raytheon threatened to sue ministers for £500m, blaming the UK Border Agency for the failings, before the two sides entered into binding arbitration to reach a settlement.

The Home Office said: "We are pleased with the judgment handed down today by the court. However, the legal process is ongoing and it would be inappropriate for us to comment further at this time."

E-Borders has been dogged by problems since its launch.

Last year the head of the UK Border Force, Sir Charles Montgomery, told MPs the scheme had been "terminated" in its current form.