As sales incentives go it's pretty extreme: one of Microsoft's Israeli distributors is claiming Microsoft offered resellers women for sex on a cruise ship.

The distributor, EIM Computerized Technologies, made the revelations about the alleged activities in papers filed with the Tel Aviv District Court.

The story in the Globes media outlet goes like this: in May 2005, Microsoft invited EIM, one of its larger Israeli distributors, and other Israeli and Turkish distributors to enjoy a tour on a cruise ship.

On board it is alleged they were offered women for sex and offered what appeared to be drugs. The EIM people demurred.

The distie alleges: "For the pleasure cruise, Microsoft, or people on its behalf, invited women who provided sexual services for money. During this cruise, the Microsoft representative encouraged the participants in the cruise to party with these women, including receiving said services. They were also offered banned substances."

Microsoft subsequently terminated its distribution arrangement with EIM, claiming that EIM had filed wrong and fraudulent sales information, and this caused EIM revenues to fall by half. EIM claims it was victimised for not taking part in the orgy.

EIM then filed a lawsuit in Israel in 2006, seeking damages of 10.5m shekels (£1.8m).

Microsoft has filed a law suit of its own in Ireland, alleging breach of contract by EIM, and looking for £2.5m compensation.

Neither EIM nor Microsoft were able to immediately comment on this story. ®