TCS settles Orange County lawsuit for $26 million

TCS settles Orange County lawsuit for $26 million

TCS settles Orange County lawsuit for $26 million

Tata Consultancy Services (TCS), India’s largest IT firm, has decided to settle its dispute with Orange County for $26 million. TCS confirmed the development but did not specify the amount paid for the settlement.

“TCS and Orange County have agreed to settle an ongoing dispute regarding the joint development of a Property Tax Management System. Both parties had asserted claims against each other, but neither admits any liability,” a TCS spokesperson said.

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 added.

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.

In the litigation, the County alleged that Tata took what was originally promised to be a two-year, $6.4 million contract and tried to stretch it into a six-year, $17 million project.

The County intended to ask the jury to award punitive damages for fraud against Tata.
According to a settlement agreement signed by attorneys for the County of Orange and attorneys for TCS and Tata America International Corporation, Tata shall pay the sum of $26 million to the County in full and final settlement of all claims arising out of or under or in the connection with the contract which were, or could have been, asserted against Tata by the County, whether alleged in the lawsuit or not.
 
The settlement amount shall be paid by wire transfer to the County, pursuant to instructions that have been or will be provided to Tata by the County within 15 days of the effective date of the agreement, the settlement stated.

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