IT services giant, Tata Consultancy Services (TCS), is set to book an additional $70 million one-time charge after the US Supreme Court declined to hear its appeal in a high-profile trade secrets dispute. The development brings the company’s total financial exposure in the case to approximately $220 million. The latest provision will be reflected as an exceptional item in the first quarter of fiscal year 2027 and will cover damages, interest payments, and legal expenses associated with the litigation.
The legal battle reached a critical milestone on June 15 when the US Supreme Court allowed a previous court ruling to stand. As a result, a damages award of $168 million in favour of DXC Technology remains in effect, according to a Reuters report.
TCS had already earmarked $150 million to address liabilities arising from the case. Following the Supreme Court’s decision, the company confirmed that it would set aside an additional $70 million, increasing the overall impact of the dispute on its finances, states the report.
Despite the sizeable charge, the company remains profitable. TCS reported a net profit of 137.18 billion rupees ($1.45 billion) during the fourth quarter.
Origins Of The TCS Dispute
The case traces its roots to a lawsuit filed in 2019 in a federal court in Dallas. The complaint was brought by Computer Sciences Corporation, the predecessor to DXC Technology. According to court filings, the company alleged that TCS hired approximately 2,200 employees from Transamerica, an insurance firm, and subsequently used their access and knowledge to help develop a competing life-insurance technology platform.
The allegations led to a lengthy legal battle that moved through multiple levels of the US judicial system.
In 2023, a jury concluded that TCS had willfully misappropriated trade secrets and recommended a penalty of $210 million. However, U.S. District Judge Brantley Starr later reduced the amount to $168 million, consisting of $56 million in compensatory damages and $112 million in punitive damages.
That reduced award was subsequently upheld by the 5th US Circuit Court of Appeals in 2025.
TCS continued to challenge the ruling, arguing before the Supreme Court that DXC should not have received unjust enrichment damages without demonstrating actual losses. The company also maintained that the punitive damages component was excessive. DXC, on the other hand, argued that the lower courts had correctly handled the case and that no further review was necessary.
