IT services provider, CSG, has lost its appeal to Fuji Xerox Australia in the NSW Supreme Court.
In August last year, Fuji Xerox issued proceedings against the ASX-listed provider (ASX:CSV) in the NSW Supreme Court to determine whether its relationship termination was valid and that it met the obligations of both parties post termination.
Three months later, Justice McDougall made orders requiring CSG to provide the print vendor with signed deeds of novation, which can be forwarded to CSG Fuji Xerox customers in Brisbane and Maroochydore to allow them to decide if they wanted to continue getting services via CSG or Fuji Xerox. The integrator planned to appeal the decision, seeking a stay of the orders.
However, the NSW Supreme Court found in the first instance, the vendor had validly terminated CSG’s dealership agreements in Brisbane and Maroochydore.
In a statement to the ASX, CSG said it was not possible to estimate the cost of damages and aggregated costs, which maybe payable to Fuji Xerox until detailed claims have been lodged and assessed.
Last year, CSG estimated it may suffer pre-tax losses ranging between $3 million to $4 million, after the court decided it must allow customers the choice of signing with Fuji Xerox Australia.
It also stated the total number of machines across Brisbane and Maroochydore represented about 10 per cent of CSG's total number of installed machines across the country.
“However, this would only be the case if every customer in Brisbane and Maroochydore consented to the novation in favour of Fuji Xerox,” CSG said at the time. “Accordingly, the impact this could have on CSG’s business will depend on the number of customers who consent to the novation in favour of Fuji Xerox or choose to stay with CSG… any potential impact on its business following the order is unlikely to be material.”
The services provider terminated its relationship with Fuji Xerox in favour of its $31 million Canon agreement.
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