Wipro Ltd., India’s third largest software exporter, has agreed to settle a lawsuit with the American unit of British electricity and energy utility company National Grid PLC for $75 million.
In the lawsuit, filed in December 2017, National Grid U.S. alleged that Wipro mishandled an enterprise resource planning (ERP) project. It sought damages amounting to $140 million from the Indian firm.
The Bengaluru-based company said in a filing with the Bombay Stock Exchange on Aug.4 that it “has effected a settlement for the release of all claims under the lawsuit with National Grid US and a stipulation of discontinuance of the lawsuit has been filed in the US District Court for the Eastern District of New York.” It also said that the cost of settlement was $75 million, which was done without admission of liability or malpractice of any kind by the parties.
Wipro said in its filing that the formalities related to the withdrawal of the lawsuit are expected to be completed within a short period. It also hoped for this settlement to be commercially beneficial for both the parties.
“National Grid has been a valued customer of Wipro for over a decade and both organizations have had a mutually beneficial relationship over the years. We believe that this settlement will be commercially beneficial for us and will help us remain focused on growth,” it said. The settlement is expected to reflect in the financials of Wipro Limited for the quarter ending September 30, 2018, it added.
National Grid U.S. operates over 9,000 miles of electricity transmission and delivers electricity and natural gas to Massachusetts, New York, and Rhode Island in the United States. The firm is headquartered in Warwick, United Kingdom.
The enterprise resource planning implementation project dates to 2009 and involved multiple vendors. Wipro joined it in 2010, and completed it in 2014.
National Grid accused Wipro of mishandling the implementation of a software system, made for managing its back-office operations. It claimed that the botched work done by Wipro resulted in several problems after the system went operational.
“The rollout of the new system was hampered by many technical issues, resulting in substantial damages and millions of dollars of additional costs to stabilize the system,” National Grid said last year, according to an earlier Reuters report.
Wipro had denied the allegations at that time. “National Grid has been a valued customer of Wipro in the U.S. and UK for several years. Wipro strongly believes the allegations misstate facts and the claims are baseless. Wipro will vigorously contest the allegations in court,” the Indian firm had said in December last year.
The issue escalated in 2014 when an audit report said that the problems in the upgrade of its legacy payroll system could cost National Grid nearly $1 billion. “The audit report largely blames National Grid’s decision to hire vendors with little experience handling SAP platforms. It points out that Wipro, one of the main vendors, had ‘virtually no experience’ implementing an SAP platform in the US,” the Business Insider had reported in October 2014.