Cable & Wireless suing IBM for £128m

NEWS Cable & Wireless (C&W) is suing IBM for £128m for the overcharging of IT services following a review of a contract signed in 2000. The details are revealed in the troubled telco's annual report, which claims a benchmarking review of IBM’s services between 1 January 2001 and 28 February 2002 found "significant levels of overcharging". Approximately £115m relates to compensation claimed for overcharging from IBM UK, and $22m from IBM in the US. IBM is contesting the claim but C&W claims the compensation figure is continuing to rise for each month the services company refuses to lower its charges. According to the report, IBM is disputing the validity of the benchmarking results and whether a framework agreement covers repayment of the charges, and has filed a counter claim for work it should have been given and payments due. A court-ordered mediation failed to resolve the issue in December last year and a preliminary hearing has been set for September this year. An IBM spokesman said the company does not comment on ongoing litigation.