(Adds response from IBM)
By Nate Raymond
NEW YORK, April 16 Mexican mobile phone operator
Iusacell SA de CV sued IBM Corp on Wednesday, accusing
the U.S. technology giant of making fraudulent representations
that caused it to lose $2.5 billion in profits.
The lawsuit, filed in federal district court in New York,
centered on a contract that Iusacell said IBM induced it to
enter into in Mexico.
"Events subsequent to the execution of the agreement have
revealed that IBM both knowingly misrepresented and wrongfully
concealed from Iusacell material facts both before and during
the parties' relationship," Iusacell said in the complaint.
IBM said in a statement that the lawsuit was a "transparent
attempt" by Iusacell, which is co-owned by media and retail
mogul Ricardo Salinas' Grupo Salinas and broadcast giant Grupo
Televisa, to avoid its contractual obligations.
IBM said it signed a long-term contract with Iusacell in
2010 under which IBM's Mexican unit made significant investments
in Iusacell's business.
"Despite major improvement to Iusacell's information
technology infrastructure and growth in Iusacell's revenues,
Iusacell has failed to pay IBM Mexico what it is owed under the
contract," IBM said in the statement.
IBM's Mexican unit already has filed an arbitration claim
against Iusacell in an effort to enforce the contract, according
to IBM, which called Wednesday's lawsuit an "ill-advised attempt
to end-run" that case.
A spokesman for Grupo Salinas had no immediate comment on
the case and a lawyer for Iusacell did not respond to a request
According to the lawsuit, Iusacell's management designed a
plan to boost the market share and revenue of the company, which
was then the third-largest mobile phone operator in Mexico.
Doubtful its existing information technology systems could
support the plan, Iusacell sought advice from IBM, the lawsuit
said. Several pages of the complaint are then redacted, leaving
it unclear what happened next.
Iusacell, however, said in the lawsuit that IBM's capacity
limits crippled its performance.
It is not known why parts of the complaint were redacted.
Companies sometimes seek to keep material confidential to
protect trade secrets.
The lawsuit seeks $2.5 billion in damages. Iusacell said its
claims are governed by Mexican law, which entitles it to both
actual damages and lost profits that stemmed from its reliance
on the alleged IBM misrepresentations.
The case is Iusacell SA de CV v. International Business
Machines Corporation, U.S. District Court, Southern District of
New York, No. 14-2697.
(Reporting by Nate Raymond in New York; additional reporting by
Jon Stempel in New York and Michael O'Boyle and Dave Graham in
Mexico City; Editing by Paul Simao)