Freedom Foods Group (ASX:FNP)'s appeal rejection enables US arbitration

Company News

by Michael Luu

The Federal Court of Australia has turned down an appeal by health foods manufacturer Freedom Foods Group (ASX:FNP) against a previous ruling in favour of Blue Diamonds Growers.

Blue Diamonds Growers took taken legal action against Freedom Foods Group, alleging that the ASX-listed company has breached its contractual obligations by producing non-organic almond milk products in competition with Blue Diamonds’ offerings.

The American company called for an arbitration to settle the dispute with Freedom Foods in the US, seeking a pecuniary compensation of over $26 million and immediate cessation of Freedom Foods’ production and distribution of MilkLAB almond milk.

Freedom Foods has responded by filing its own lawsuit under the Australian judicial jurisdiction, in an attempt to block the US arbitration by removing the case from the US legal system.
The beleaguered snacks maker sought regulatory recognition of the licence and distribution agreement with Blue Diamond as a franchise agreement under the Australian Franchise Code. The Federal Court of Australia dismissed this claim on March 5.

The $130 million company lodged a request to review the judicial body’s decision. The Australian superior court of record has rejected this appeal, which indirectly enables the dispute to be a matter for assessment in an arbitration in California.

Shares in Freedom Foods Group are trading 7.45 per cent lower at $0.44