Ripple Labs Inc. has lost its bid to keep the litigation battle in its home turf of California. The legal battle which has raged on for close to a year now has seen Ripple contest the terms laid out in an agreement it got into with financial services software provider, R3 HoldCo. The agreement was spearheaded by the then Ripple CEO, Chris Larsen and entitled R3 to buy 5 billion units of XRP of $0.0085 per unit at any point by September 2019 regardless of the prevailing market conditions.
The lawsuit which has put the two former partners in bitter court battles was kicked off when Brad Garlinghouse, attempted to the options contract in June 2017 through an email to David Rutter, R3’s CEO. R3 went on to sue Ripple in a Delaware court for breaching the contract but the case was later thrown out by the Delaware court.
Ripple countersued in its home state of California in a San Francisco law court seeking the right to terminate the options contract. It accused R3 of having failed to fulfill a number of promises outlined in the contract. Ripple also accused R3 of attempting to take advantage of the partnership to steal its expertise and then use it to develop a competing product. The company also claimed in the lawsuit that it had the right to terminate the contract as R3 failed to help the company sign up even a single bank on their platform and for withholding crucial information such as the withdrawal of major banks like J.P Morgan and Goldman Sachs.
In one of the paragraphs of Ripple’s countersuit, it stated:
“Rather, R3 had misrepresented its resources and current ability to perform solely to induce Ripple into executing the Agreements. For example, although R3 represented to Ripple that it would have access to its large consortium of leading banks, R3 knew and had reason to know that several key banks that would be instrumental to the company success would soon be departing from its consortium”
Ripple has however lost its bid to have the case listened to and settled in its backyard of California. The case will now be settled in a Manhattan law court, R3’s backyard. Ripple had sought to block this claiming that it would be impossible to have an impartial hearing in Manhattan and that R3 would have an unfair advantage.
The news had a negative impact on XRP’s price which went down for a few hours before it started to recover.