The row centres on a deal agreed in December 2000 when C&W signed a Global Framework Agreement (GFA) under which IT services are supplied by IBM. According to the C&W annual report, in order to monitor the quality of services, the GFA contained benchmarking provisions, which set out the processes and procedures by which the services supplied by IBM were to be assessed against a pre-determined objective.
C&W said that in February 2002, the parties engaged Compass America Inc to conduct a benchmark for the 14 month period the contract had been running and the results revealed significant levels of over-charging by IBM. The company complains: For each month that IBM refuses to reduce its charges, a further substantial overcharge arises.
According to C&W, a dispute then broke out as to whether the GFA obliged IBM to repay the amount that the benchmark established it had been overcharged. There was also disagreement over the validity of the Compass report. So C&W took legal action.
IBM has thrown a few legal punches of its own, making claims in respect of work that it says C&W should have given it under the GFA and IBM Japan is seeking payment of charges it claims are due to it from C&W.
IBM will not give its side of the story, saying that it never comments on ongoing litigation. A trial date has been set in September when the court will first look at the meaning of the overcharging related provisions of the GFA.
While C&W is currently struggling, it is certainly enriching the legal profession. While it battles against class action suit in the US, it is currently suing the governments of Panama and Latvia.
Source: Computerwire
