Dublin-based travel software firm Datalex has entered into arbitration against a negligent customer, the company announced in its annual report.

However, the customer's failure to pay is not expected to significantly diminish Datalex's 2004 revenues.

The customer, which Datalex declined to identify, entered into a five-year contract in October 2001. A total of $5.1 million (€4.3 million) of the contract is outstanding, according to a spokesman for Datalex.

The customer "has fully provided for the obligation in its accounts," according to Mr Gerry Hennigan, an analyst with Goodbody Stockbrokers, meaning that the customer has adequate cash to cover the $5.1 million balance.

Neither the spokesman nor Mr Hennigan knew why the customer decided to stop payment.

The customer notified Datalex last December that it would cease payment. Mr Hennigan said he didn't think that the customer's failure to pay would harm the company's revenues this year.

"At this stage, we do not see any impact to our projected revenue forecasts for fiscal year '04 ($33.5 million) and fiscal year '05 ($35.5 million)," he said. " believe that a worst-case scenario is that payments from the contract could fall short of expectations but eventually be honoured."

Mr Hennigan's projections compare with Datalex's 2003 revenues of $29.1 million, an increase of 12.8 per cent on the previous year.

Mr Hennigan speculated that the customer might propose a settlement, in which Datalex would receive some, but not all, of the outstanding funds.