Tenix Solutions IMES and Oakton have come to an agreement over an outstanding contract dispute — stretching back almost a year and a half — with Tenix today paying Oakton a $15 million settlement.
In an ASX statement, Oakton said the $15 million payment, which comes without any admission of liability by either party, would result in a cancellation of the current Supreme Court proceedings issued against Tenix earlier this year.
The dispute erupted in February 2010 with consulting and IT services company Oakton (ASX:OKN) being hit for close to $20 million in damages following the break-down of arbitration between the company and Tenix Solutions IMES.
In an ASX statement at the time, Oakton said that following a series of issues with a project involving the company and Tenix, Tenix had served on Oakton’s contracting subsidiary a notice “purporting to terminate the relevant contract and a claim for damages estimated $19,364,900.”
Oakton then hit back in March 2010 with its subsidiary, Oakton Services, issuing proceedings in the Commercial Court of the Supreme Court of Victoria against Tenix.
In its writ and statement of claim, Oakton claimed Tenix had wrongfully repudiated a subcontract for the provision of services by Oakton relating to the design, building and testing of software to be used by Tenix as part of an Infringement Management and Enforcement System which Tenix is required to build and operate under contract between Tenix and the State of Victoria. As a result of the proceedings Oakton claimed damages exceeding $12 million.
In February this year Oakton said the then ongoing arbitration between it and Tenix had adversely affected the first year financial results, causing a slump in earnings before interest, tax, depreciation and amortisation (EBITDA) of $2.1 million.