TCS settles Orange County lawsuit for $ 26 million
India's largest IT firm Tata Consultancy Services and its US affiliate have paid Orange County, Calfornia, $ 26 million to settle a lawsuit over what the latter termed as a "failed replacement" to the county's automated property tax system. "TCS and Orange County have agreed to settle an ongoing dispute regarding the joint development of a Property Tax Management System," a TCS spokesperson said.
The spokesperson added that both parties had asserted claims against each other, "but neither admits any liability". "The settlement was reached after a mediation conducted by Magistrate Judge Jay C. Gandhi, representing a compromise between the two parties, versus the prospect of a lengthy trial in Orange County," the spokesperson said but declined to confirm or deny the lawsuit amount.
According to a statement by the US county, "Tata Consultancy Services and its US affiliate have paid the County $ 26 million to settle litigation over a failed replacement to the County's automated property tax system that initially was to have been completed in 2010 but was never delivered." The county in the US state of California said that on August 19, 2016, it received notification that the USD 26 million settlement payment from Tata had been wired to the County Treasurer-Tax Collector. In exchange for this payment, the county will now dismiss its lawsuit against Tata, which in turn will dismiss its cross complaint, it added. TCS shares were trading 0.65 per cent lower at Rs 2,586.40 on the BSE.
The county said that settlement amount was more than four times the $ 6.4 million cost of the contract, and more than five times the amount the county actually paid to Tata. In its legal complaint, the county alleged that "Tata fraudulently induced the county into selecting Tata to develop the property tax system and then presented false claims in the form of invoices and reports, provided false and unachievable milestone completion dates, and intentionally understaffed the project to maximise profit."