Court backs $631 million judgment against Boeing

NEW YORK (Reuters) - A California court has approved a jury verdict against Boeing Co (BA.N), which means the plane maker and defense contractor must pay former customer ICO Global Communications (Holdings) Ltd (ICOG.O) $631 million in damages, according to ICO on Tuesday.

In the latest move of a long-running legal dispute over a satellite contract, the Los Angeles Superior Court backed a jury's decision in October to award ICO compensatory damages of $371 million, punitive damages of $236 million, plus prejudgment interest.

If it does not pay immediately, Boeing must also pay ICO 10 percent of the total each year, worth about $63 million, ICO said.

Boeing did not immediately return a call seeking comment on the judgment. The company said at the time of the verdict that it would seek an appeal that could take several years to run its course, and that it believed it did not break the law or breach any contract.

The dispute dates back to a $2 billion contract initially awarded in 1995 by ICO to Hughes Electronics, which was acquired by Boeing in 2000.

ICO's plan was to build and launch a dozen satellites that would form the basis of a new global communications network, but according to arguments presented in the case, only one satellite was ever launched into space, another exploded on launch, and 10 more are incomplete and in storage.

ICO, a satellite communications company based in Reston, Virginia, was taken over by wireless pioneer Craig McCaw in 2000.

Chicago-based Boeing initially sued ICO in 2004 after ICO terminated its contract for the satellites. ICO countersued, accusing Boeing of breach of contract and fraud, and sought $2 billion in damages.

Boeing has denied any wrongdoing and said ICO's problems stemmed from a bad business decision betting on the future of satellite phones.

(Reporting by Bill Rigby; editing by Richard Chang)