TCS to Take $70 Million Additional Hit After U.S. Supreme Court Rejects Appeal

According to media reports, India’s largest IT services company, Tata Consultancy Services (TCS), will record a one-time exceptional charge of $70 million in the first quarter of FY2027 after the U.S. Supreme Court declined to hear its appeal in a long-running trade secrets dispute with DXC Technology.

Advertisement

Supreme Court Ends Legal Road

The decision leaves intact a $168 million damages award in favor of DXC Technology.

TCS said it had already provisioned $150 million for the case and will now set aside an additional $70 million to cover damages, interest, and legal expenses.

As a result, the company’s total financial exposure related to the case rises to approximately $220 million.

Advertisement

Despite the charge, the impact is relatively modest compared with TCS’s scale. The company reported a net profit of ₹13,718 crore ($1.45 billion) in the March quarter alone.

Origin of the Dispute

The case dates back to a 2019 lawsuit filed by DXC’s predecessor, Computer Sciences Corporation, in a federal court in Dallas.

CSC alleged that TCS hired around 2,200 employees from insurance company Transamerica and used their internal knowledge and system access to develop a competing life-insurance administration platform.

A jury in 2023 found that TCS had willfully misappropriated trade secrets and initially awarded $210 million in damages.

Advertisement

However, U.S. District Judge Brantley Starr later reduced the amount to $168 million, comprising $56 million in compensatory damages and $112 million in punitive damages.

The ruling was subsequently upheld by the 5th U.S. Circuit Court of Appeals in 2025.

TCS’s Arguments Rejected

In its appeal to the Supreme Court, TCS argued that DXC should not receive unjust enrichment damages without proving actual financial losses and contended that the punitive damages award was excessive.

DXC maintained that the lower courts had correctly applied the law and that the case did not warrant Supreme Court review.

With the Supreme Court declining to intervene, the litigation has effectively reached its conclusion, forcing TCS to absorb the financial impact while moving forward from one of the most significant legal disputes faced by an Indian IT services company in the U.S. market.

Key Takeaways

• TCS to book an additional $70 million exceptional charge.
• Total exposure in the case rises to $220 million.
• U.S. Supreme Court declined to hear TCS’s appeal.
• DXC Technology retains a $168 million damages award.
• The case originated from allegations of trade secret theft linked to Transamerica employees.

Advertisement

Note: We are also on WhatsApp, LinkedIn, and YouTube to get the latest news updates. Subscribe to our Channels. WhatsApp– Click Here, YouTube – Click Here, and LinkedIn– Click Here.