Dialight to pursue its claims to trial in Sanmina litigation

As reported by Dialight plc (LON:DIA) previously, and most recently in its half-year results for the period ended 30 June 2022, Dialight has been involved in ongoing litigation with its former manufacturing partner, Sanmina Corporation in relation to the termination of their manufacturing services agreement.

Both parties issued formal legal proceedings in December 2019 and, following unsuccessful mediation at the beginning of 2022, Sanmina lodged a motion for summary judgment to dismiss certain elements of Dialight’s claims and counter-claims.

The Court’s ruling on Sanmina’s dismissal motion (first filed on 2 May 2022) was released to the parties under seal on Tuesday 14 March 2023.  The notification of this ruling is available at https://ecf.nysd.uscourts.gov.  A final redacted version of the judgment (necessitated by the inclusion in the judgment of commercially confidential materials) should be published on or around 11 April 2023.

The court denied Sanmina’s motion to dismiss Dialight’s fraudulent inducement claim and denied its motion for summary judgment on Sanmina’s accounts receivable claim.  The court granted Sanmina’s motion as to the dismissal of Dialight’s willful misconduct claim.  The fraudulent inducement claim, together with various claims and counter-claims relating to accounts receivable and accounts payable, will now proceed to trial, pending any appeal process.  Following the court’s examination of the evidence supporting Dialight’s fraudulent inducement claim against Sanmina, and of other related matters, Dialight will now rigorously pursue its claims to trial.

If Dialight’s claims are successful at trial, the range of outcomes could include the payment by Sanmina to Dialight of between $0 and c. $220m (excluding legal costs and judicial interest).  If Sanmina’s claim is successful at trial the range of outcomes could include the payment by Dialight to Sanmina of between $0m and $8.3m (excluding legal costs and judicial interest).

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