The South Korean Defense Acquisition Program Administration (DAPA) has filed a lawsuit against Raytheon and BAE Systems , seeking compensation of $60m for their failure to implement a KF-16 upgrade deal.

The new action, which is filed with the Seoul Central District Court, represents a counter lawsuit against the one filed by BAE in a US court last year, The Korea Times reported.

BAE filed a case asking to block DAPA’s demand that the company has to cover the costs from a cancelled contract for KF-16 upgrades.

The latest lawsuit demanded $43.25m from BAE and $17.99m from Raytheon.

"The new actionrepresents a counter lawsuit against the one filed by BAE in a US court last year."

A DAPA official was quoted by The Korea Times as saying: "We took action in accordance with the contract, which stipulates that if the companies do not implement plans as agreed, then DAPA takes a legal action."

Earlier, BAE signed $1.6bn contract to upgrade the South Korean Air Force’s 134 KF-16s. Under this deal, the company was responsible to upgrade the avionics system, communications display and cockpit interface.

Raytheon was contracted to deliver active electronically scanned array radar for the fleet.

The project was later cancelled after the US Government and BAE asked DAPA to provide an additional $70m.

BAE then claimed that it does not owe any money in conjunction with this programme since the company failed to force the US Government to withdraw its proposed price increase.

The KF-16 is a Korean version of the F-16 Fighting Falcon, which is powered by F100-PW-229 engines. The aircraft is built by Korean Aerospace Industries under license from Lockheed Martin in the 1990s.