Yahoo
announced yesterday that it had prevailed in an appeal of a $2.75 judgment in Mexico obtained by former joint venture partners:
The appellate decision overturned all monetary awards against Yahoo! Inc. and reduced the monetary award against Yahoo! Mexico to $172,500. Yahoo! Mexico was awarded $2.6 million in the original judgment, and this award was confirmed by the appellate decision. The plaintiffs may appeal this decision.
The litigation began in November 2011. Plaintiffs were Worldwide Directories and Ideas Interactivas. The case arose from the termination of a joint venture agreement between Yahoo de Mexico and Ideas Interactivas. In roughly 2002, the companies agreed to jointly produce online and print yellow pages: “Yahoo! Paginas Utiles.”
The project was initially successful and the parties sought to expand the deal to other countries and regions, including Central America, Australia and Japan. However in 2005, Yahoo decided to end the deal.
The contract was supposed to run through 2009. As a result of the termination of the relationship Ideas Interactivas said it was forced into bankruptcy. Worldwide Directories and Ideas Interactivas sued in 2011 for breach of contract and lost profits.
The lower court (49th Civil Court of Mexico) entered a preliminary judgment in favor of plaintiffs for $2.75 billion against Yahoo and Yahoo de Mexico on November 28, 2012. The judgment represented a substantial chunk of Yahoo’s cash-on-hand. It was also more than Yahoo’s Q4 revenue.
Thus the legal victory is a significant one for Yahoo as it seeks to use its cash for operations and acquisitions.
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