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    Breach of contract: MillerCoors sues HCL Tech for $100 million


    The case, filed in Illinois federal court on March 13, alleges that HCL Tech failed to perform on a SAP upgrade contract it won in 2013.

    ET Bureau
    BENGALURU/NEW DELHI: is being sued for $100 million, or about Rs 654 crore, by its client MillerCoors for breach of contract. The Chicago-headquartered brewer claimed that the Indian IT company failed to meet project deadlines and staff the project.

    The case, filed in Illinois federal court on March 13, alleges that HCL Tech failed to perform on a SAP upgrade contract it won in 2013.

    MillerCoors has demanded the case be heard by a jury, according to the docket listing for the suit. ET has accessed the docket listing. The contract was then worth about $53 million and an additional $9.6 million was added to the contract price to adjust for time frames, US tech magazine Computerworld said, citing the filing.

    “HCL was unable to adequately staff the project and maintain the project schedule,” the filing said. HCL did not respond to email and multiple calls seeking comment.

    MillerCoors is seeking “compensatory damages in an amount to be determined at trial in excess of $100,000,000.” The filing said that the brewer terminated the contract in June and said it would seek a new supplier. The contract “was aimed at driving efficiencies, innovation and growth across MillerCoors' various breweries by adopting a common set of best practices business processes and implementing them in a new enterprise SAP software solution,” the filing said.

    HCL Tech and its US arm HCL America are both named in the case. Analysts said enterprise resource planning implementations are complicated and there have been some failures in implementing such solutions. HCL Tech had acquired UK company Axon in 2011 to build its ERP expertise. The company had outbid Infosys to snap up the company for £441.1million.

    “I don’t think the case filing will have material effect on HCL Tech’s business. There are always some failures and you have to weigh one client saying something bad versus having several reference clients,” an analyst with a Mumbai brokerage told ET. The analyst, who declined to be identified, said the impact could change based on whether HCL loses the suit.

    Indian IT companies have faced such issues before. In 2013, TCS was sued by US district Orange County. The litigation was over replacement to the County's automated property tax system that initially was to have been completed in 2010 but was not delivered. The company finally settled the suit for $26 million in 2016.
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    9 Comments on this Story

    Varun1433 days ago
    All these companies hires useless people to work on such huge projects, send them to US and then they leave to find a job and settle in US.
    So the problem is with these companies trying to make huge bucks by hiring cheap labour who does not even know how to read and understand an algorithm (forget about writing one).
    Most of the indians in US are worthless that's is why stuck in low paying jobs, a** licking (so they don't get fired) and making bad name for capable people.
    bdutta Dutta1437 days ago
    When will the clients realize that they hire the lowest paid employees in India while making a huge profit while fooling the clients.
    abcd 1437 days ago
    Side effect of boot licking politics. Actual hard workers are forced to leave the firm by ill treatment and unduly pressure.
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