Quad Electronics sues Datawind over Aakash tablet contract breach

Yesterday, the Datawind CEO, Suneet Singh Tuli issued a press note clarifying the allegations made by Quad Electronics and also how it has been working at an improved customer service. TheEconomicTimes reports that Quad Electronics has now sued the UK firm and the maker of the world’s cheapest tablet alleging that the latter ‘failed to procure its contracted inventory or pay for the tablets.’

Sued..

On the other hand, reportedly, Datwind also said that it will not be procuring any further tablets from Quad Electronics and will also settle the issue legally. Quad has sent a legal notice to DataWind for non-payment of $1.12 million for the outstanding dues and inventory procured for DataWind. R Soin, founder-CEO of Quad Electronics has said that Datwind had ordered 50,000 tablets and has failed to pick up its inventory breaching the contract.

In a press statement issued yesterday, Tuli said, “Quad Electronics breached Datawind’s intellectual property, circumvented their relationship with IIT-Rajasthan, signed a direct MoU with them and then sold off their inventory in the open market. Datawind would also like to clarify that Quad Electronics has been paid for the units delivered to Datawind, except for the 600 units that remain unpaid by IIT-Rajasthan.  DataWind’s counterclaim against Quad exceeds any amount due to them.  There is no further payment due to Quad, contrary to their allegations.”

Soin says that Quad has manufactured 10,000 more tablets which are not sold yet. The Non-payment of dues can be confirmed from the bankers, Bank of Bahrain & Kuwait and Barclays Plc, involved in the letter of credit, he adds.

Suneet Tuli strikes back saying "Only 10,000 units were picked up because that's all Quad manufactured."  He adds, "Quad should show why they weren't able to submit required documents in a timely manner to get payment through letter of credit. They've been entirely paid for their services. It'll now be resolved in the UK courts. We won't be picking up any more inventory from Quad. We've contracted other suppliers.” 

Soin further claims that DataWind has tied up with Quad’s customer for manufacturing the Aakash 2 and have been poaching talent from Quad to adopt the expertise required to manufacture the product. Tuli, on the other hand, says that Quad can't take DataWind's technology and sell it on its own. However, Soin reveals that the contract has a clause for 'freedom of action' to manufacture similar products for any other original equipment manufacturer." 

The Aakash has been the most celebrated tablet for the country, but the recent spats have sure raised questions about the timely delivery of the lakhs of pre-orders that the tablet has received.