UK based mobile payments service provider, Upaid Systems says that the Court of Appeal in London has affirmed a January High Court Judgment in Upaid’s favour against Satyam Computer Services, rejecting the Indian software company’s effort to block Upaid’s fraud and forgery claims in a Texas court.
This new ruling allows Upaid's lawsuit against Satyam alleging forgery, fraud, misrepresentation, and breach of contract, and what Satyam admits are “extremely large sums of money”, to proceed to a US trial by jury in a Texas federal court.
Upaid originally filed the Texas lawsuit in April 2007 following the revelation in Texas of forged documents previously provided by Satyam to Upaid. Satyam had sought a High Court injunction in London in September 2007 to try to block the Texas case, arguing that a 2003 commercial agreement terminating the relationship between the two companies precluded all future claims against it for all past practices and that any residual claims against it had to be tried in London.
The High Court categorically refused Satyam's request in January 2008. After hearing testimony from senior executives of both companies and legal experts in a four day trial, the Court ruled that the Texas claims could proceed. Satyam appealed this decision, and it was this appeal which was dismissed last Friday.
The history of the dispute can be traced back to a software development contract issued by Upaid in 1996 to Satyam. Unusually, a formal contract transferring any developed Intellectual Property (IP) to Upaid was not signed and it is this which has lead to a series of disputes between the companies. In 1998, Upaid tried to enforce a patent application in the USA and brought out the IP rights for a cash sum - later converted into equity in Upaid. A court case in 2005 where Upaid tried to enforce the patents in Texas is where the matter got particularly messy with the allegations of fraudulent documents - which potentially invalidated the patent. It is the Texas dispute which is at the core of the current legal action in London.
Upaid spokesperson Joanne Hunter commented, "We think this case is of considerable importance. Satyam is one of India's largest and best known providers of outsourced software services. As they themselves said last Friday, the Court of Appeal result is likely to be very detrimental to them and a lot is at stake. This is a very serious case of misconduct that involves fraud and forgery by one of India’s leading software companies. The damage done to Upaid has been made even worse by the time wasted in London while Satyam tried to avoid the consequences of their own actions, rather than doing all it could to help a former customer by addressing the substantive issues raised in Texas. But, with the London issues out of the way, we can now look forward to dealing with what really matters in Texas, where the forgeries first came to light.”
On February 23, 2008 Satyam completed 20 years of existence. It is considered as India's youngest software consulting company to exceed $2 billion in annual revenue.
Posted to the site on 14th May 2008
Posted to: www.cellular-news.com/story/31154.php