Cisco (News - Alert) last week initiated a lawsuit against HP over a $58 million contract.

The suit, which was filed in the Superior Court of California in Santa Clara, stems from a dispute over an HP customer contract that was entered into in 2012 and canceled by that customer the following year. Cisco was to have provided VoIP service support for this customer; the services agreement was financed by Cisco Capital.

According to the complaint Cisco filed, there was a breach of the Master Installment Payment Letter Agreement and the related schedule between Cisco Capital and HP; Cisco is asking for a declaratory judgment regarding the construction of the Five Year Services Letter Agreement between Cisco Systems (News - Alert) and HP with respect to how the cancellation credit to HP should be calculated.

“As a result of the cancellation credit,” Cisco’s complaint reads, “the balance of HP’s loan with Cisco Capital was reduced to approximately $58 million. Taking into account the cancellation credit, the next payment from HP to Cisco Capital was due August 1, 2015….”

HP, according to the Cisco complaint, disagrees with its method for calculating the cancellation credit. “In other words,” Cisco says, “HP is asking Cisco Systems to issue a credit that would result in a windfall to HP for being terminated by the customer.”

Like so many companies in IT and communications today, Cisco and HP are both allies and competitors. Indeed, HP is pushing to win new business in the enterprise networking space in which Cisco is No. 1. HP in March announced the acquisition of Aruba Networks to help it in that effort. Aruba, for which HP paid $3 billion, offers an integrated networking solution that addresses Wi-Fi, wired, remote access, and branch networking.