Quad Electronics sues DataWind for Aakash contract breach

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The fight over the world’s cheapest tablet is getting murkier. Even as retail customers wait for delivery of Aakash, the Hyderabad based assembler of the tablet, Quad Electronics, has sued DataWind alleging that the British Indian firm failed to procure its contracted inventory or pay for the tablets, says an Economic Times report.

DataWind retorted saying it won’t procure any more tablets from Quad and will settle the issue legally.Quad has served a legal notice to DataWind for non-payment of US$ 1.12 million against dues outstanding and inventory procured for DataWind.

“DataWind contracted us for 50,000 tablets and has failed to pick up its inventory breaching the contract,” R Soin, founder-CEO of Quad Electronics said.

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Quad claims DataWind procured only 10,000. “Quad has manufactured 10,000 more tablets which are not sold yet,” Soin said. DataWind’s CEO Suneet Tuli returns the fire saying “only 10,000 units were picked up because that’s all Quad manufactured.”

“Non-payment of dues can be confirmed from the bankers, Bank of Bahrain & Kuwait and Barclays Plc, involved in the letter of credit,” Quad’s Soin charged.

Replying, Tuli said the letter of credit is for banks to honour, not for DataWind. “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,” Tuli said. “We won’t be picking up any more inventory from Quad. We’ve contracted other suppliers,” he added.

Quad and DataWind’s public spat comes even as thousands of buyers are posting messages on online consumer forums citing delays in delivery of the tablets, hawked online for Rs 2,999 each About three million pre-bookings for the tablets had been done on Aakashtablet.com, and through email by DataWind.

Many customers made pre-payments through cheques, six to eight weeks back. Quad also charged that DataWind has tied up with a customer of Quad for manufacturing Aakash II.

“They have been poaching talent from Quad to adopt the expertise required to manufacture the product,” Soin pointed out.

Tuli added that Quad can’t take DataWind’s technology and sell it on its own. But Quad’s Soin retorted saying that the contract has a clause for ‘freedom of action’ to manufacture similar products for any other original equipment manufacturer.”

On the other hand, DataWind issued a media statement last week saying that “Quad Electronics has breached DataWind’s intellectual property, circumvented their relationship with IIT-Rajasthan, signed a direct agreement with them and then sold off their inventory in the open market.”

Soin countered that DataWind is making baseless allegations about copyright infringement against “the 15 year old Quad and an IIT.”

He also said there is ‘no direct arrangement between IIT-Rajasthan and Quad. “The pact which Tuli is talking about pertains to one we signed with IIT on convergence systems.” It has also informed the Ministry of Communications & IT and IIT Rajasthan, regarding DataWind’s default.

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