Tata Consultancy Services (TCS) will recognise a one-time exceptional charge of $70 million in the first quarter of FY27 after the US Supreme Court refused to hear its appeal in a long-running trade secrets dispute involving DXC Technology.
The decision effectively upholds a lower court ruling that awarded damages to DXC, bringing the legal proceedings to a close.
With this additional charge, TCS’s total exposure in the case rises to $220 million. The company had already set aside $150 million earlier and will now account for the remaining amount to cover damages, accrued interest, and legal expenses.
TCS stated that it has evaluated the matter based on the current status of proceedings and will recognise the additional provision as a one-time exceptional charge in its Q1 FY27 financial results.
For context, the company reported a net profit of ₹137.18 billion ($1.45 billion) in the fourth quarter, indicating that the impact, while material, is manageable relative to its overall earnings scale.
The dispute originated in 2019 when Computer Sciences Corporation (now DXC Technology) filed a lawsuit in a Dallas federal court.
The complaint alleged that TCS misused confidential information obtained through employees recruited from Transamerica to develop a competing life insurance administration platform.
It was further alleged that TCS hired around 2,200 employees from Transamerica, who had access to proprietary systems and sensitive data, which was then used in developing competing solutions.
In 2023, a jury found TCS guilty of wilful misappropriation of trade secrets and initially recommended damages of $210 million.
A US district judge later reduced the award to $168 million, comprising compensatory and punitive damages, a ruling that was subsequently upheld by the 5th US Circuit Court of Appeals in 2025.
TCS had challenged the ruling before the US Supreme Court, arguing that damages were excessive and that unjust enrichment claims required proof of actual losses. DXC, however, maintained that the lower courts’ decisions were legally sound.
With the Supreme Court declining to intervene, the case has effectively concluded, allowing TCS to account for the financial impact in upcoming quarterly results.
