Danone has lost an appeal to have the decision for a stay of proceedings in its damages suit against Fonterra overturned.
In July, the High Court of New Zealand granted Fonterra a stay of proceedings – a move which halts further legal process in a trial – because the same issues were being dealt with in an arbitration process in Singapore.
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The lawsuit is related to last year’s recall of products containing a batch of Fonterra whey powder over concerns it was contaminated with a bacteria that can cause botulism. The recall later turned out to be a false alarm. Danone, however, estimated the impact to it from the recall resulted in lost sales of EUR350m (US$476m).
Danone appealed the July ruling saying the judge should “not have exercised his discretion” in granting the temporary stay due to “the circumstances of this case”.
“[Fonterra] and its subsidiaries are entitled to avoid having to face and defend two overlapping cases simultaneously, especially when there are reasonable prospects that the first in time (the Singapore arbitration) may well resolve all the issues between the parties, including critical issues relating to the interpretation and application of the Supply Agreement which will have implications for the High Court proceeding,” read the judgement document.
The court also ruled Danone should pay the Fonterra’s costs for the appeal.
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By GlobalDataDanone did not respond immediately to just-food’s requests for comment.
