Boeing Hit by U.K. Military Penalty After Data Servers Fried

(Bloomberg) --

Boeing Co.’s U.K. defense unit took a 1.7 million pound ($2.2 million) hit from the British Ministry of Defence after its data servers fried in soaring heat two years ago.

The penalty was revealed in a lawsuit Boeing Defence U.K. Ltd is bringing against Ark Data Spring Park Ltd., a data services firm it hired. Boeing is seeking damages after suffering a 3.4 million pound loss because one of its server rooms reached 81 degrees Celsius (177.8 degrees Fahrenheit).

The heat damaged various pieces of hardware and interrupted the service it was providing to the government, the company says in the lawsuit filed Dec. 24.

The ministry informed the unit in June 2018 that it was applying financial deductions because of the incident, the aircraft maker said in the lawsuit. Boeing, which provided sensitive and operationally critical information to the ministry, said Ark had failed to control the temperature of the room after its automatic cooling system broke.

The lawsuit comes amid a turbulent time for its parent company, whose Chief Executive Officer Dennis Muilenburg was ousted over the holiday season. The planemaker’s reputation and finances have been battered after two deadly crashes of its top-selling 737 Max jetliner, which it has temporarily halted output of.

In the early hours on Wednesday, a Boeing 737-800 jetliner bound for Ukraine crashed after takeoff in Iran, killing everyone on board. Evidence shows the older version of the 737 was most likely shot down by an Iranian surface-to-air missile, officials including Canadian Prime Minister Justin Trudeau and the U.K.’s Boris Johnson said. Iran’s civil aviation authority said it’s “certain” the plane wasn’t shot down.

Under its sub-contract with Boeing, Ark was responsible for providing climate controlled areas that the firm could use to store the computer equipment it was using to serve the ministry, Boeing said in the lawsuit.

“The subject matter of the claim relates to an incident that occurred almost two years ago and the cause of the incident was identified and rectified at that time,” Ark said in a statement. “We are defending the claim and are in communication with our insurers, our third party suppliers and Boeing to ensure that the claim will be professionally managed to a conclusion.”

Boeing and the Ministry of Defence declined to comment.

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