Samsung Electronics and Microsoft said Tuesday that they have settled a contract dispute over payments of royalties on handset component patents. "Samsung and Microsoft are pleased to announce that they have ended their contract dispute in U.S. court as well as the ICC arbitration. Terms of the agreement are confidential," said Samsung’s Jaewan Chi, Executive Vice President and Global Legal Affairs & Compliance Team and Microsoft’s David Howard, Corporate Vice President and Deputy General Counsel.

Microsoft sued Samsung last year in a federal court in New York, accusing Samsung of breaching a collaboration agreement by initially refusing to make royalty payments after the U.S. company announced its intention to acquire Nokia's handset business in September 2013.

The lawsuit claimed Samsung owed $6.9 million in interest on more than $1 billion in patent royalties it delayed paying. Samsung has countered that the Nokia acquisition violated its 2011 collaboration deal with Microsoft.

According to sources, the two companies have updated their two contracts ? a cross-licensing agreement and a business collaboration agreement ? to help Samsung pay less in Android royalties payments on patents that Microsoft's Nokia division own.

The agreement paves the way for Samsung to release new mobile phones using the Windows platform. The Korean company also plans to release an updated Surface Pro tablet using the Windows system soon.

The settlement on Monday also ends Samsung's request for arbitration with the Hong Kong office of the International Court of Arbitration of the International Chamber of Commerce.

In a separate move, South Korea's antitrust authority on Thursday reopened its review on the merger between Microsoft and Nokia's devices and services business to preempt any potential market distortions and ensure fair competition.