SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 27, 2003
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LORAL SPACE & COMMUNICATIONS LTD.
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(Exact name of registrant as specified in its charter)
Islands of Bermuda 1-14180 13-3867424
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
c/o Loral SpaceCom Corporation
600 Third Avenue, New York, New York 10016
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(212) 697-1105
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Item 5. Other Events.
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Space Systems/Loral, Inc. ("SS/L"), a subsidiary of Loral Space &
Communications Ltd. ("Loral"), was a party to an Operational Agreement with
Alcatel Space Industries, pursuant to which the parties had agreed to cooperate
on certain satellite programs, and an Alliance Agreement with Alcatel Space
(together with Alcatel Space Industries, "Alcatel"), pursuant to which Alcatel
had certain rights with respect to SS/L. The agreements between Alcatel and SS/L
were terminable on one year's notice, and, on February 22, 2001, Loral gave
notice to Alcatel that they would expire on February 22, 2002.
In April 2001, Alcatel commenced an arbitration proceeding challenging the
effectiveness of Loral's notice of termination and asserting various alleged
breaches of the agreements by SS/L relating to the exchange of information and
other procedural or administrative matters. In February 2002, the arbitral
tribunal issued a partial decision, which upheld the validity of Loral's
termination effective February 22, 2002 and Alcatel's claims as to certain
breaches. The partial decision was confirmed by the District Court for the
Southern District of New York on June 25, 2002. The arbitral tribunal has
provided both parties with an opportunity to file any additional claims or
counterclaims they may have. In March 2002, Alcatel submitted additional claims
against Loral and SS/L and is seeking at least $350 million in damages in
respect of all of its claims.
On January 27, 2003, Loral and SS/L received from the arbitral tribunal a
partial decision on the additional claims and counterclaims. The arbitral
tribunal ruled in favor of Alcatel on most of its claims alleging breaches of
the Operational Agreement or Alliance Agreement and ruled against Loral and SS/L
on the counterclaims. The arbitral tribunal set a schedule for further
submissions by the parties and for hearings to be held in May 2003 to determine
whether any of the breaches caused Alcatel to suffer injury and to determine the
amount of damages, if any. If the arbitral tribunal finds that Alcatel has
sustained damages, there could be a material adverse effect on Loral's
consolidated financial position and results of operations.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Loral Space & Communications Ltd.
By: /s/ Avi Katz
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Name: Avi Katz
Title: Vice President and Secretary
Date: January 31, 2003