Andersen Consulting yesterday claimed victory in the dispute between it and parent company Arthur Andersen after a three-year arbitration process was completed. Andersen Consulting will lose its name and pay almost $1 billion to Arthur Andersen, but says its newfound freedom is worth far more.
Andersen Consulting South Africa says the impact on its business will be negligible.
International Chamber of Commerce-appointed arbitrator Guillermo Gamba ruled that Andersen Consulting is to stop using the Andersen name by 31 December and that the money paid into escrow while the dispute was underway is to be paid to Arthur Andersen. That payment will total more than $830 million.
Andersen Consulting brushes aside such details. "This is an extremely favourable ruling," said Joe Forehand, global managing partner and CEO.
Andersen Consulting says it had offered a cash figure "in the billions" to settle the dispute earlier, and was not disappointed at the escrow payment. Forehand said a name change is also nothing but an inconvenience, as the company has seen marketplace confusion between itself and Arthur Andersen and has been considering a change in any event. "Consulting is only a small part of our business," he said.
Arthur Andersen focused on the fact that the ruling did not find Arthur Andersen in breach of any of its contractual obligations and that the damages claimed by Andersen Consulting - originally more than a billion dollars - had not been awarded.
Both parties indicated that they would not challenge the ruling or pursue further legal action.
The 130-page ruling orders no transfer of technology between the two firms, but orders Andersen Consulting to return and cease using technology jointly owned, controlled and developed with Arthur Andersen. Andersen Consulting says this does not impact its business, and that none of the technology it currently uses will fall into that category.
Wayne Furphy, local Andersen Consulting country manager, says that other than the name change, customers will not be affected by the ruling. "We will follow the changes instituted globally," he says.
The dispute between the companies dates back to the early 1990s, and Andersen Consulting filed for arbitration in December 1997. Andersen Consulting sought to be freed from its obligations to the parent, which included a termination payment of 1.5 times annual revenue. Andersen Consulting says the creation of Arthur Andersen Business Consulting meant it was financing a direct competitor.
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