I agree about the contract, but to my understanding it was a...

I agree about the contract, but to my understanding it was a little more than a comment by a competing business, it was actually an offer. CW liked the offer so much that it put Sigma on notice to either beat it or they walk, despite the fact they had a legally binding contract.

CW perhaps tried to call Sigma's bluff (thinking Sigma needs CW more than CW needs Sigma) and maybe thought Sigma would be desperate to come to some kind of agreement prior to any legal action. To Sigma's credit, they stuck to their guns and had confidence in the terms of their contract.

Failing to lodge a defence is akin to agreeing with the plaintiff's claim, so it will be interesting to see what happens. However, it should be noted that CW could still lodge a defence, but they just need to jump through a couple of other hoops in order to lodge it late.

My guess is, CW do not want to proceed but we have not heard anything from Sigma because CW have tried to drag Sigma back to the negotiating table.