Texas Court Sets October Trial for DUG’s $2.4M Supplier Dispute
DUG Technology's US subsidiary is heading to trial over a disputed $2.4 million supplier invoice, with a counterclaim of $3.1 million adding complexity to the Texas court battle.
- Disputed supplier invoice from 2021 triggers US$2.4 million claim
- DUG US declared force majeure after Texas storm in 2021
- Supplier initiated legal proceedings in June 2024 after nearly three years of silence
- DUG US filed a US$3.1 million counterclaim related to energy sales
- Trial scheduled to commence on 6 October 2025 in Texas federal court
Background of the Dispute
DUG Technology Ltd, a leader in geoscientific computing, has disclosed that its US subsidiary, DownUnder GeoSolutions (America) LLC, is embroiled in a legal dispute over a supplier invoice dating back to 2021. The invoice relates to an energy management services agreement in Texas, which became contentious following an unprecedented storm that year. DUG US declared force majeure, effectively suspending its obligations under the contract due to the storm’s impact.
Despite this, the supplier issued an invoice in May 2021 that DUG US disputed. After a lengthy period of no correspondence, spanning nearly three years, the supplier unexpectedly initiated legal proceedings in June 2024, seeking payment of US$2.4 million plus interest.
The Legal Battle Heats Up
In response to the supplier’s claim, DUG US has filed a counterclaim valued at US$3.1 million. This counterclaim arises from obligations related to the sale of unused contracted Wholesale Blocks of Energy, which DUG alleges the supplier, MP2, was required to purchase. The counterclaim adds a significant layer of complexity to the dispute, potentially offsetting the supplier’s claim if successful.
The United States District Court for the Southern District of Texas has now set the trial date for 6 October 2025, marking a critical juncture for both parties. DUG Technology has expressed confidence in its defense, maintaining that the supplier’s claim lacks merit and pledging to defend vigorously.
Implications for DUG and Investors
This litigation underscores the challenges faced by companies operating in volatile energy markets and the risks inherent in contractual relationships impacted by force majeure events. For DUG, the outcome could have financial implications given the material sums involved, though the counterclaim may mitigate potential losses.
Investors will be watching closely as the case progresses, particularly for any indications of financial provisions or impacts on DUG’s US operations. The company’s transparent communication and prior disclosures in annual and interim reports reflect a commitment to keeping shareholders informed.
As DUG continues to expand its footprint globally, navigating such disputes will be crucial to maintaining its reputation and operational stability in key markets like the United States.
Bottom Line?
With trial looming, DUG’s legal showdown in Texas could reshape its US energy dealings and investor confidence.
Questions in the middle?
- What evidence will DUG present to support its force majeure defense and counterclaim?
- How might the court ruling affect DUG’s financial statements and provisions?
- Could this dispute influence DUG’s future contracts or risk management strategies in the US?
