India's Satyam Computer Services Ltd. (SAY, 500376.BY) said late Monday that a U.S. Court has allowed its contention that any tax liability arising from its out-of-court settlement with Upaid Systems Ltd. be withheld from the $70 million settlement amount.

"The Court denied the motion brought by Upaid for summary judgment for a declaration that it [Upaid] is entitled to receive the total settlement amount of $70 million from the company [Satyam] in satisfaction of settlement agreement, net of taxes," the Indian software exporter said in a statement.

Upaid officials couldn't be immediately reached for comment.

In December, Satyam--now rebranded Mahindra Satyam--had offered to settle all disputes with Upaid, related to a failed patent application of the U.K.-based provider of mobile and online payment-transaction services, by paying $70 million. Upaid, which had outsourced some projects to Satyam, had said the patent application was rejected because of the Indian company forging some documents.

Satyam, listed on the New York Stock Exchange and in India, had motioned a U.S. court in February, seeking it to declare that if there is any tax deduction required, it should be deducted from the settlement amount that it has deposited in an intermediary, or escrow, account.

-By Romit Guha and R. Jai Krishna, Dow Jones Newswires; +91-9967586928; romit.guha@dowjones.com
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