TCS Hit With $70 Million Exceptional Charge After US Supreme Court Rejects DXC Appeal

Tata Consultancy Services (TCS) has run out of legal road in the United States. The Supreme Court declined on 15 June to hear the company's appeal in a trade secrets dispute with DXC Technology, leaving a $168 million damages award intact and forcing TCS to absorb an additional $70 million hit in its first quarter results.

The company said the incremental provision covers damages, interest and legal costs beyond the $150 million it had already set aside. Total financial exposure in the matter now stands at $220 million.

The Case At A Glance

• 2019: Computer Sciences Corporation, later merged into DXC Technology, sues TCS in Dallas federal court

• Allegation: TCS hired around 2,200 Transamerica employees and used their insider access to build a competing life insurance platform

• 2023: Jury recommends $210 million penalty for wilful trade secret theft

• Trial judge cuts award to $168 million, $56 million compensatory and $112 million punitive

• 2025: Fifth US Circuit Court of Appeals upholds the reduced figure

• 15 June 2026: US Supreme Court declines to hear TCS's appeal, closing all further legal options

What TCS Argued And Why It Failed

TCS took two arguments to the Supreme Court. It said DXC should not have received unjust enrichment damages without proving actual financial losses, and that the $112 million punitive component was disproportionate to the compensatory award.

DXC maintained the lower court decisions were sound and needed no further review. The Supreme Court agreed with that position by refusing to take the case.

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What It Means For The Numbers

The $70 million will appear as a one-time exceptional charge in TCS's Q1FY27 results, covering the gap between the $150 million already provisioned and the final $220 million total exposure including interest and legal costs.

For context, TCS posted net profit of ₹13,718 crore in Q4FY26. TCS first disclosed the litigation to stock exchanges in June 2024 and provided an update in November 2025.

Sources:

The Hindu Businessline

NDTV

Reuters