The curtain has been raised on an unusual commercial dispute between gaming technology companies triggered by an alleged software flaw which saw punters erroneously issued with winning lottery tickets worth many millions of pounds.
Under a sale and purchase agreement, company A had bought all the shares in company B from company C for £32 million. However, company B subsequently received complaints in respect of video lottery terminals that it had supplied to the Italian market.
One punter had allegedly been issued in error with a winning ticket for more than Euros 13 million by one of the terminals. His true winnings should have been less than Euros 12 and there had been several other alleged instances of erroneous winning tickets being issued for very substantial sums.
Company B faced proceedings in Italy brought by one of its customers and a number of punters who wanted their tickets honoured. Its potential liabilities had been tentatively put at Euros 71 million. In those circumstances, company A sought an indemnity against those prospective losses from company C.
In refusing to grant company A summary judgment, the High Court found that the construction of indemnity provisions in the agreement were not straightforward. Further evidence was required in order to gauge the strength of company C’s defence and a full trial of the dispute was therefore required.