It's Ugly: Valve Sues Activision, Activision Threatens to Sue Valve

An ugly court action is underway and it involves a pair of video game titans.

On Tuesday Valve filed suit against Activision Blizzard in U.S. District Court in Seattle. The suit alleges that Activision refused to honor an agreement to abide by an arbitrator's April 6th award decision involving a 2002 dispute over royalties.

The arbitrator in that case awarded Valve $2,391,932, an amount that Valve says is less than it sought, but which it will accept because both parties agreed to be bound by the arbitration process.

Activision, however, challenged the award, claiming that Valve had been overpaid by $424,136 in years past. For its part Valve alleges that Activision failed to properly raise this issue before the abitrator whom, the suit claims, refused to consider it for procedural reasons.

Against that backdrop, Activision cut Valve a check last week for $1,967,796 - the amount handed down by the arbitrator less the disputed $424K. According to Valve's suit, Activision said that it wouldn't pay the rest and if Valve went to court Activision would countersue. Valve has apparently called Activision's bluff and the parties are now once again at odds.

DOCUMENT DUMP: Grab a copy of the complaint... 

UPDATE: The original 2002 lawsuit was not against Activision, but instead targeted Sierra in a dispute over licensing Valve games to cyber-cafes. Sierra was owned by Vivendi, so when Activision merged with Vivendi in 2008 it inherited the Valve case in the deal.