Coforge Faces Potential $11 Mn Indemnity Claim From Client Over Data Breach
Coforge says it intends to contest the client’s demands related to the arbitration claim resolutions
IT services company Coforge has received a second supplementary notice of indemnification from a North American client, potentially involving claims that could exceed USD 11 million.
The client is seeking indemnity for an amount of USD 7,597,780 for in-principle settlements with certain arbitration claimants over an alleged data breach. Additionally, there is a possible further claim of USD 4,276,800 for settling demands from other claimants who have not yet reached an agreement.
In October of last year, Coforge had reported during an earnings call that it had received a notice from a North American client requesting indemnification for third-party claims and associated costs due to a purported breach of contract. At that time, the specific amount of the claim was not disclosed.
Coforge has stated that the total financial impact of these claims remains unascertained. The company is currently consulting with its offshore legal counsel regarding the indemnity notice. It now intends to contest the client’s demands related to the arbitration claim resolutions, arguing that the claimed amounts are not reasonably subject to indemnification.
The company also clarified that, as of now, it is not involved in any litigation or arbitration proceedings, and no tribunal, court, or agency has initiated any action against it.
