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Cognizant claims the firm overcharged for its services and took advantage of Cognizant’s contractual requirement to pay Schwartz’s advance fees and costs. In response to the New York lawsuit, Schwartz sued Cognizant in Chancery Court alleging that the New York lawsuit violated a Delaware forum provision in the indemnification agreement that he signed with the company in 2013.

In March 2022, Chancellor Lori W. Will denied Schwartz’s motion for an anti-suit injunction and denied his request to hold Cognizant in contempt for prosecuting the claims against his attorneys in New York.

On Thursday, Cognizant’s attorney, David E. Ross of Ross Aronstam & Moritz LLP, argued that it was completely reasonable and appropriate to seek legal fees for the Chancery Court action because it did not fall into the so-called “buckets” of advanceable legal expenses under the company’s 2013 bylaws or its indemnification agreement.

According to Ross “There’s a bucket under which advanceable cases fall, and this falls outside of it.” Ross said that Cognizant was looking for two things from the court: (1). an accounting of Schwartz’s legal expense in the Chancery lawsuit, which according to Ross, he refused to provide, and (2). a court order allowing Cognizant to offset those costs against Schwartz’s future billing.

Vice Chancellor Will noted, “What’s so strange about this is I’m dealing with an injunction lawsuit and within it, there’s a motion for advancement.” “Why couldn’t all this have been dealt with at the indemnification stage?” To which Ross replied. ”We don’t see any reason that this couldn’t be dealt with now.”

Ross told the court “We are advancing tens of millions of dollars.” “What we’re talking about here is not a pittance. And enforcing one’s contractual rights is not bad faith.”

The court took the matter under submission.

Schwartz v. Cognizant Technology Solutions Corp., Case number 2021-0634, filed in the Court of Chancery of the State of Delaware.