A Tribunal of arbitrators in London acting under the authority of the International Chamber of Commerce and chaired by Lord Neill of Bladen QC, has found in favor of Worldspan in its proceedings against Abacus Distribution Systems Pte Ltd. (“Abacus”), the Singapore-based computer reservation system (CRS), and its owner airlines, which include Singapore Airlines, Cathay Pacific Airways, China Airlines, All Nippon Airways, and others, has granted joint and several monetary damages and costs to Worldspan in excess of $40 million.
In an opinion handed down August 7, 2000, the Tribunal concluded that Abacus had committed fraud by intentionally deceiving Worldspan concerning Abacus’s secret negotiations with Sabre Holdings Corporation (“Sabre”); had misused Worldspan trade secrets by disclosing the proprietary information to Sabre; and had breached contracts between Worldspan and Abacus. The Tribunal stated that there was: “...powerful evidence of a guilty mind on the part of Abacus consistent with Worldspan’s complaint; and along with the other evidence adduced on other issues in these proceedings, it appears to form part of a general pattern of dishonesty by Abacus; and even if it were not, it amounts (at least) to a reckless disregard for Abacus’s own contractual obligations towards safeguarding from misappropriation Worldspan’s confidential and proprietary information.”
“We are delighted by the Tribunal’s award,” commented Paul J. Blackney, president and CEO for Worldspan. “From the outset, our claims against Abacus were unequivocal and our evidence was strong. As was borne out by the arbitrators’ incisive opinion and the award for damages, the Tribunal agreed fully with our arguments. This is a clear, decisive and important victory for Worldspan
In the early 1990s, Abacus entered into several contracts with Worldspan. Abacus and Worldspan also purchased a five-percent equity interest in each other. In January 1998, Worldspan initiated arbitration proceedings with the ICC against Abacus, claiming Abacus secretly negotiated and formed an alliance with Sabre and engaged in improper and unlawful activities.
During a three-week trial in May 1999 before a three-member Tribunal, Worldspan presented conclusive, documented evidence that Abacus had repeatedly covered up and lied about the nature and status of its dealings with Sabre and that Worldspan had relied upon Abacus’s statements, incurring damages as a result. Worldspan presented evidence of a “verbal handshake” between top executives of Abacus and Sabre, a secret agreement that contradicted Abacus’s direct and repeated statements to Worldspan regarding its relationship with Sabre. Abacus also, on multiple occasions, intentionally disclosed Worldspan confidential and proprietary information to Sabre, a competitor to Worldspan.
The Tribunal concluded that Abacus breached its fiduciary duty to Worldspan and the contractual obligations Abacus owed Worldspan by intentionally deceiving Worldspan over a period running from July 1996 to December 1997. Abacus and its owner airlines conspired together to further the deceit practiced on Worldspan.
Worldspan demonstrated that its assertions justified a legal claim for fraud. The Tribunal agreed, saying Abacus’s actions had seriously defrauded Worldspan by misleading and concealing from Worldspan its plans to partner with Sabre and that Abacus had destroyed many documents reflecting such fraud, stating that “many relevant documents which should have been disclosed by Abacus…have apparently been destroyed, and rejected as “untrue” Abacus’s claim that Worldspan had received the same information as other members of the Abacus Board.
In its 285-page opinion, the Tribunal also found that Abacus, by agreeing to the transaction with Sabre, had breached a series of marketing and technology agreements it had previously developed with Worldspan. The arbitrators noted that as part of the technical effort for the switch to Sabre, Abacus disclosed to Sabre, Worldspan’s proprietary information and failed to take required steps to safeguard that information.
In a separate and still pending action, Worldspan has filed suit against Sabre in U.S. District Court in Atlanta, claiming tortious interference with Worldspan’s contracts and business relations, misappropriation of Worldspan’s trade secrets, conspiracy to defraud, wiretapping and violation of antitrust statutes. Worldspan is also seeking monetary damages for these violations. Though this litigation was suspended during the just-completed arbitration, Worldspan is now ready to proceed.
“With the proceedings in London resolved fully in our favor, Worldspan is moving forward aggressively in preparing our case against Sabre,” said Douglas L. Abramson, Worldspan’s senior vice president, general counsel and secretary. “We are very eager to resolve the other half of litigation before a jury of citizens here in Atlanta. Once again, we will be using Jonathan D. Schiller of Boies, Schiller & Flexner, LLP as lead trial counsel.”
Worldspan provides global electronic distribution of travel information, Internet products and connectivity, and electronic commerce capabilities for travel agencies, travel service providers and corporations worldwide. The company’s three lines of business are travel supplier services, e-commerce, and global distribution systems for the worldwide travel industry. The Worldspan reservations system provides more than 20,800 travel agencies and other users worldwide with travel data and booking capabilities for hundreds of the world’s leading travel supplier services. Worldspan is the market leader in e-commerce for the travel industry, processing more than 50 percent of all online travel agency bookings. The company maintains world headquarters in Atlanta, Georgia. Worldspan is owned by affiliates of Delta Air Lines, Northwest Airlines and Trans World Airlines. Additional information is available at www.worldspan.com