INDIANAPOLIS (AP) – A dispute between the state of Indiana and IBM over the company's failed attempt to privatize Indiana's welfare services is headed before the state Supreme Court.

The court will hear oral arguments Thursday in the legal battle stemming from a 2006 contract that Indiana awarded the Armonk, New York-based company to automate much of the state welfare system.

Then-Gov. Mitch Daniels canceled the $1.3 billion contract in 2009 following complaints from welfare system applicants about long wait times, lost documents and improper rejections.

The two sides sued each other, and a Marion County judge awarded IBM $52 million in 2012. 

The Indiana Court of Appeals in February found IBM failed to deliver its part of the deal, but ruled it was still entitled to nearly $50 million in fees.