H&K seeks arbitration in breach of contract suit

Heckler & Koch asked a Minnesota court last month to dismiss a complaint filed against it claiming the gunmaker violated the terms of a multi-million dollar supply agreement with aerospace and defense contractor Orbital ATK.

Germany-based H&K was subcontracted to supply ATK prototype weaponry to fulfill obligations held with the U.S. Army, specifically for a shoulder-fired 25mm airburst grenade system dubbed “the Punisher.”

According to the complaint, filed in January, ATK claimed H&K 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, Guns.com previously reported.

“H&K 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 reads.

In justification of breaking from the contract, the German gunmaker 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.

ATK asserts the XM25 would not be used against enemy combatants who aren’t seeking cover behind a fortified position and thus the international dictate doesn’t apply.     

Because ATK failed to deliver the 20 units, the Army terminated its contract with the company on April 5, an Army spokesperson said in an email to Military.com last month, adding that even after extensive negotiation efforts, the contractor failed to come up with an acceptable alternative resolution.

ATK claims this is H&K’s fault and says 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 H&K’s breaches of contract, lost profits” and other associated costs.

H&K is seeking to either have the case dismissed or stayed until the two parties can reach an arbitration agreement out of court, which District Court Judge David S. Doty is currently weighing, according to a court document.

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