Cognizant Technology Solutions Corp, on Wednesday, said allegations made by Syntel unit against it and Trizetto are ‘without merit’ and the firm would vigorously defend them.
On Tuesday, Reuters reported that Cognizant and Trizetto were sued by the unit of Syntel for allegedly interfering with a contract and misappropriating confidential information. In a lawsuit filed on Monday in U.S. District Court in Manhattan, Syntel Sterling Best Shores Mauritius Ltd sought $3.4 million from TriZetto and $6.1 billion in punitive damages based on Cognizant’s net worth, the news agency added.
Syntel said in its lawsuit that because of the acquisition, it terminated an existing contract it had with TriZetto, and that, as a result, it was entitled to ‘transition rebates’ of $3.4 million. TriZetto has refused to pay the rebates, the lawsuit says.
Cognizant acquired TriZetto last year for $2.7 billion from private equity firm Apax Partners LLP, and closed the acquisition in November. The deal added health-care-focused IT services, care management and benefit administration capabilities.
“Cognizant and TriZetto are focused on helping our healthcare clients deliver improved quality of care and superior health outcomes. We believe the allegations made by Syntel are without merit and will vigorously defend against them,” a Cognizant spokesperson said in an e-mail response.
According to Reuters, damages in a lawsuit are awarded only after a defendant is found liable, and under U.S. Supreme Court precedent, the ratio of punitive to compensatory damages generally must be below 10:1.
