Tata Consultancy Services will take a $70 million exceptional charge following the US Supreme Court's decision to reject its appeal in a trade secrets dispute with DXC Technology. The ruling, delivered on June 15, leaves TCS with combined exposure of $220 million in the case. The firm announced on Monday that it will record the additional charge in its first quarter results for 2027, covering damages, interest and legal expenses.

The Supreme Court's move upholds a $168 million damages award that the lower courts had previously determined. This comprises $56 million in compensatory damages and $112 million in punitive damages. TCS had already reserved $150 million for the case, meaning the new provision of $70 million represents the additional financial burden stemming from the failed appeal.

The dispute originated in 2019 when Computer Sciences Corporation, DXC's predecessor, filed suit in Dallas federal court. The company alleged that TCS recruited approximately 2,200 employees from Transamerica, an insurance firm, and exploited their privileged access to develop a competing life-insurance platform. A jury found in 2023 that TCS had willfully misappropriated trade secrets and recommended $210 million in damages, though US District Judge Brantley Starr reduced this to $168 million.

TCS mounted an aggressive legal defence, arguing to the Supreme Court that DXC should not have received unjust enrichment damages without demonstrating concrete losses. The company also contended that the punitive component of the award was disproportionate. However, the 5th US Circuit Court of Appeals had already upheld the lower court's judgment in 2025, and the Supreme Court's refusal to hear the case effectively ended TCS's appellate options.

The financial impact comes as TCS reported fourth-quarter net profit of 137.18 billion rupees ($1.45 billion). The $220 million total exposure represents a significant liability for India's largest IT services company, though the firm appears prepared to absorb the cost through provisions already made and the additional charge.