EDS has started legal proceedings against Transport for London (TfL) to prevent Cubic from running the systems supporting the Oyster smartcard.

The news follows TfL’s termination of dealings with TranSys – the consortium in which EDS and Cubic are the major shareholders – and it is understood that Cubic was about to sign a contract with the transport body around the same time the restriction order was filed.

A Securities and Exchange Commission filing from Cubic revealed that the legal challenge may have an impact on the company’s revenue in the short term, but the embargo is expected to be lifted by year-end, by which time most of the capital losses incurred are forecast to be replaced.