Mahindra Satyam today said a New York court has given a favourable judgment in its lawsuit against Upaid Systems and ruled that the British company is responsible for all the tax liability on the settlement amount of USD 70 million paid by the IT firm.

"The court adjudged and declared that the Settlement Agreement requires that Upaid must cooperate with the Escrow Agent (IDBI Bank) to allow the Escrow Agent to withhold any applicable taxes from the USD 70 million settlement amount," Mahindra Satyam said in a statement.

Mahindra Satyam, earlier known as Satyam Computer Services, had filed a lawsuit in a New York court against Upaid, seeking enforcement of a legal settlement agreement between the two signed in December, 2009.

At issue is the tax liability on the settlement amount, which Satyam claims is Upaid's responsibility under the agreement.

In the lawsuit, Satyam had asked the court to confirm that Upaid is responsible for any tax liability arising from the settlement.

In December, 2009, Satyam agreed to pay USD 70 million to settle all outstanding legal disputes with Upaid.

As part of the December agreement, Satyam entered into an escrow agreement with Upaid and deposited the settlement amount of USD 70 million into an escrow account.