Datalex, the Howth-based firm which develops software for the airline and travel market, faces a $27 million (€25 million) lawsuit in the US next month.PSA Inc, a travel services firm based in Los Angeles, is pursuing the case in the District Court of California, Jamie Smyth
In a court filing, the firm alleges Datalex committed fraud, engaged in unfair business practices and has broken an existing contract with PSA Inc.
Datalex is vigorously opposing the allegations made by PSA Inc, which emerged following a software licensing deal signed between the two firms in 2000.
In a statement issued yesterday, Datalex said it would present a comprehensive legal defence against the countersuit from PSA Inc, which trades as Psazz.com. The case is due to be heard on April 15th by district court judge Mr Dean Pregerson.
PSA Inc's allegations are part of a counterclaim filed by the firm in October 2001 following a lawsuit initiated by Datalex in June 2001 for breach of contract.
At this time, Datalex sued PSA Inc for about $1 million in fees which it alleges were not paid following work undertaken by the Howth-based company on software products for PSA.
Datalex originally agreed to deliver and license booking engine software to PSA for five years in March, 2000. PSA paid the first instalment due under this contract but failed to pay the rest of the fees outlined in the contract.
Datalex filed a lawsuit against PSA on July 27th, 2001, alleging breach of contract in an attempt to recoup the fees. However, PSA filed a counterclaim against Datalex on October 22nd, 2001 alleging eight separate charges including fraud, unjust enrichment, breach of contract and unfair business practices.
Court filings show PSA has claimed that Datalex made a number of representations about its products, and says the firm did not have the "technical capability to deliver the working system it touted having". The claim went on to say that Datalex faked demonstrations to make it appear that its booking engines would work. "Those representations were false in that other companies had complained that the booking engines did not work," says the claim in the court filings.
Earlier this month, Datalex applied for a motion of summary judgment which was denied by Judge Pregerson.
PSA claims to have had actual investment losses of more than $27 million due to Datalex's failure to deliver adequate software under the contract.
Datalex chief executive Mr Neil Beck said yesterday he was confident that the firm would receive a favourable outcome.
