Amstrad set to appeal against Seagate award
Wednesday 09 July 1997
The interest award comes on top of pounds 57.5m damages that Amstrad won in May after the High Court agreed that Seagate had supplied the company with faulty hard disc drives which lead to the failure of Amstrad's PC2386 office computer.
Amstrad, chaired by Alan Sugar, had originally claimed damages of pounds 110m plus interest for the loss of profit on actual and potential sales of the PC2386 in 1990 and 1991, plus the cost of buying new hard disc controllers to replace the original equipment which Seagate had wrongly blamed for the failure of the disc drives.
Seagate was also blamed by Amstrad for the failure of its bid to enter the office computer market, and the subsequent collapse of customer confidence in its computer products.
A spokesman for Amstrad said yesterday that the company believed the revised damages total, including interest rolled up since 1989, should be at least pounds 95m. It will now go back to court claiming that the way in which the interest and tax liabilities were calculated was incorrect. Seagate has also been granted leave to appeal the decision, which could result in the legal fight rumbling on for another couple of years.
Lawyers acting for Amstrad in the UK and US will decide within the next few weeks whether to proceed with a separate action for punitive damages against Seagate in America. If this case goes ahead, Amstrad will allege that Seagate's actions in supplying faulty equipment and failure to admit liability constitutes fraud, for which the courts can award punitive damages of up to four times the commercial costs.
Amstrad is also taking proceedings in the superior court in Orange County, California against Western Digital, another US supplier of hard disc drives. The company alleges the disc drives were also faulty, and is claiming damages of pounds 70m.
The eventual proceeds of the law-suits could be worth up to 100p-a- share to holders of Amstrad's 116 million shares, which gained 2.5p to 286p yesterday. Last month shareholders approved plans to break Amstrad up and offer holders a mixture of shares in Betacom, its existing quoted subsidiary; Viglen, a newly quoted company which would carry on the personal computers business, plus a loan note worth 163p a share. Shareholders would also retain the right to the proceeds of the legal settlements.
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