Oakton has begun its legal battle in the Supreme Court of Victoria against the traffic infringement and management branch of Tenix Solutions.
The ASX-listed (ASX:OKN) services provider is claiming for damages exceeding $12 million.
The amount includes $8.5 million receivable and also the delay and increased costs of working claims, legal costs and interest.
Oakton alleges Tenix, wrongfully repudiated a subcontract for the provision of services by Oakton in relation to the design, building and testing of software to be used by Tenix.
The software was to be used as part of an Infringement Management and Enforce system required to build and operate under a contract between Tenix and the State of Victoria.
Oakton has rejected Tenix claims of alleged breaches and purported termination of the subcontract.
Tenix previously terminated the contract and filed a claim of $19.36 million in damages from the services provider.
Oakton said it would vigorously defend any counter claims Tenix might make.