• by Joe Mandese  @mp_joemandese, February 3, 2009

After more than a year and a half of arbitration, Publicis' Starcom MediaVest Group and Donovan Data Systems today announced they have reached an agreement and have ended the arbitration process. Terms of the settlement were not disclosed, but the companies described it as "mutual" and said all claims have been withdrawn.

The arbitration process, which was stipulated as part of SMG's original service contract with DDS, began in July 2007, after the two companies came to loggerheads over the development of a new, state-of-the-art digital media processing system, and SMG opted to move their business to DDS rival MediaBank.

The companies said they will continue to work together under multi-year agreements in the UK and Canada--adding that the agreement also provides for SMG in the U.S. to continue the use of the DDS system for electronic commerce in the Spot TV marketplace (DARE) through 2011.

We are pleased to have reached a mutual agreement to end the arbitration and move forward," Laura Desmond, CEO of Starcom MediaVest Group, said in a prepared statement.

"SMG, Zenith Optimedia and Saatchi are important global clients and we share a long, continuing partnership with all of them," added DDS Chairman-CEO Michael Donovan.

ZenithOptimedia Group, a sister Publicis agency of SMG's, was not affected by the arbitration or the switch to MediaBank, and operates under a separate contract with DDS.