Satyam had argued that VGE should have brought their claims during an arbitration in 2005. The arbitrator had ruled that all of VGE's ownership interest in the 50:50 JV - Satyam Venture Engineering Services (SVES) - be transferred to Satyam. VGE had complied with the order at that time.

After Raju confessed to a fraud in a letter to investors in 2009, VGE in December 2010 filed an 'instant action' case, alleging that Satyam was engaged in a massive fraud even before the joint venture started.

"We hold that because plaintiffs' (VGE and the Trust) complaint adequately alleges that Satyam wrongfully concealed the factual predicate to plaintiffs' claims, the defence of claim preclusion does not apply.

"Thus, the district court erred in granting defendants' (Satyam) motion to dismiss. We therefore reverse the judgement of the district court and remand for further proceedings," the US States Court of Appeals for Sixth Circuit ruled.

As per the court documents, Satyam had approached Venture Industries Australia, a company owned by the Trust, for a joint venture to provide auto industry engineering services.

Satyam told the Trust that it was an attractive business partner, with a strong brand and recognition as a leading global IT company, having a broad base of automotive customers.

It further said it was a publicly traded company and was audited, liquid, and financially stable.

The Trust later formed a separate legal entity, VGE, which eventually formed a JV in the year 2000 with Satyam. The relationship, however, soured in 2005 and the matter reached arbitration.

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