The BlackBerry-Qualcomm Arbitration Case, Explained

An interim arbitration decision required QUALCOMM, Inc. (NASDAQ: QCOM) to refund BlackBerry Ltd (NASDAQ: BBRY) $814 million for overpaid royalties.

Nearly a year ago, the companies agreed to arbitrate a dispute regarding Qualcomm’s royalty cap and its applicability to BlackBerry payments from certain subscriber unit sales between 2010 and 2015.

Qualcomm's Wednesday press release offered an alternative description of the issue: "[W]hether Qualcomm's voluntary per unit royalty cap program applied to BlackBerry's non-refundable prepayments of royalties."

See Also: Big Winner Of Intel-Mobileye Deal: Blackberry?

The company noted it doesn't agree with the arbitration result but accepts its binding and non-appealable nature. It further stated that the decision doesn't affect license agreements beyond BlackBerry's "unique" contract.

Meanwhile, BlackBerry maintained its intent to maintain its partnership with Qualcomm.

"BlackBerry and Qualcomm have a longstanding relationship and continue to be valued technology partners," BlackBerry CEO John Chen said in a press release. "We are pleased the arbitration panel ruled in our favor and look forward to collaborating with Qualcomm in security for ASICs and solutions for the automotive industry."

The companies had announced the arbitration process April 20, 2016, and held a binding arbitration hearing between Feb. 27 and March 3. The final award, including interest and attorney fees, will be announced after a May 30 hearing.

Qualcomm shares were down 0.87 percent in pre-market hours, while Blackberry, whose shares were briefly halted on the news, resumed trading up 15.58 percent.