Tata Consultancy Services (TCS) announced on Tuesday that it will record a one-time exceptional charge of $70 million in the first quarter of FY27 after the US Supreme Court declined to hear its appeal against a lower court ruling in a long-running legal dispute with Computer Sciences Corporation, now part of DXC Technology.
In a regulatory filing with the BSE, the company stated that it had already set aside $150 million for the case in accordance with applicable accounting requirements. TCS will now recognize an additional $70 million for damages, interest obligations, and legal expenses, which will be reflected as a one-time exceptional charge in its Q1 FY27 financial results.
Background of the Legal Dispute
The legal battle began in 2019 when Computer Sciences Corporation filed a lawsuit in a federal court in Dallas, alleging that TCS used confidential information obtained through former Transamerica employees to develop a competing platform for administering life insurance operations. The complaint claimed that TCS hired nearly 2,200 employees from Transamerica and benefited from their access to proprietary data, systems, and internal information.
In 2023, a jury found that TCS had intentionally misappropriated trade secrets and awarded damages of $210 million. US District Judge Brantley Starr later reduced this amount to $168 million, comprising $56 million in compensatory damages and $112 million in punitive damages. The Fifth US Circuit Court of Appeals affirmed this revised judgment in 2025.
Supreme Court Decision
TCS had petitioned the US Supreme Court for a writ of certiorari, arguing that DXC had been granted unjust enrichment damages without proving actual losses and that the punitive damages were disproportionate. However, on June 15, 2026, the Supreme Court denied the petition, leaving the appellate court's decision unchanged. TCS had previously disclosed developments related to the litigation through exchange filings in June 2024 and November 2025.
DXC Technology argued that the lower courts had correctly applied the law and that there was no reason for the Supreme Court to revisit the matter. With the Supreme Court's refusal to hear the appeal, TCS faces a final damages award of $194.2 million, including the additional charge.
