Cognizant sued by Syntel unit following TriZetto acquisition

By Nate Raymond

NEW YORK (Reuters) - Cognizant Technology Solutions Corp and the healthcare IT services provider it recently acquired have been sued by a unit of competitor Syntel Inc for allegedly interfering with a contract and misappropriating confidential information.

In a lawsuit filed on Monday in U.S. District Court in Manhattan, Syntel Sterling Best Shores Mauritius Limited sought $3.4 million from the IT provider, TriZetto, and $6.1 billion in punitive damages based on Cognizant's net worth.

Cognizant acquired TriZetto last year for $2.7 billion from London-based private equity firm Apax Partners LLP.

Cognizant and Syntel did not immediately respond to requests for comment on Tuesday.

Cognizant said in November that it had completed the TriZetto acquisition and that the combination would enable healthcare organizations to increase efficiency.

Syntel said in its lawsuit that because of the acquisition it terminated an existing contract it had with TriZetto, and that as a result it was entitled to "transition rebates" of $3.4 million. TriZetto has refused to pay the rebates, the lawsuit says.

Damages in a lawsuit are awarded only after a defendant is found liable, and under U.S. Supreme Court precedent, the ratio of punitive to compensatory damages generally must be below 10:1.

(This story has been refiled to fix typographical error in fifth paragraph)

(Reporting by Nate Raymond and David Ingram; Editing by Bernard Orr)