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Dialight plc (LSE:DIA) has announced the results of its ongoing litigation with Sanmina Corporation, following the jury’s verdict in their legal dispute. The case revolved around claims of breach of contract under their Manufacturing Services Agreement (MSA) and allegations of fraudulent inducement and willful misconduct.
The jury rejected Dialight's claims of fraudulent inducement and wilful misconduct against Sanmina. However, the jury did find in favor of Dialight on a breach of contract claim, awarding the company $0.9 million in damages due to Sanmina’s breach of the MSA.
On the other side, the jury also upheld Sanmina’s claims that Dialight had breached the MSA in relation to Sanmina's accounts receivable (AR) and excess and obsolete (E&O) materials. As a result, Dialight was ordered to pay approximately $5.3 million in damages for the AR claim and an additional $3.4 million for the E&O claim, bringing the total damages awarded against Dialight to nearly $8.7 million.
In response to the verdict, Dialight has stated it is currently reviewing its legal options, including post-trial motions that could potentially challenge the level of damages, interest, and legal costs. Additionally, the company is evaluating the possibility of an appeal, signaling that the legal battle with Sanmina may not be fully concluded.
This litigation stems from a broader dispute between the two companies over the management and fulfillment of their manufacturing partnership, which has evidently resulted in significant financial and operational repercussions for Dialight.
