Danone has said the court was "wrong" in granting Fonterra a stay of proceedings

Danone has said the court was "wrong" in granting Fonterra a stay of proceedings

Danone has expressed its disappointment in a decision by a New Zealand court to uphold an earlier ruling to grant Fonterra a stay of proceedings in one of the two legal cases between the companies.

The French food group is looking to recoup losses from Fonterra after last year's botulism scare involving the New Zealand dairy company led, it claims, to lost sales of EUR350m (US$476m).

The two businesses are involved in legal disputes in New Zealand and in Singapore.

On Friday (7 November), the New Zealand Court of Appeal stuck to an earlier decision in which Fonterra was granted 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. Danone was also ordered to pay Fonterra's costs for the appeal.

In an email to just-food, a spokesperson for Danone said it believed the High Court action was "wrong in law and in fact". As as a result, the dairy firm appealed the decision to the Court of Appeal.

The spokesperson added the stay in proceedings "creates undue delay in having Danone's separate High Court claims heard... there is no reason both matters cannot proceed together".

The lawsuit is related to last year's scare over a batch of Fonterra whey powder concentrate used in products made by manufacturers including Danone. The products were recalled over concerns the whey powder concentrate was contaminated with a bacteria that can cause botulism. The recall later turned out to be a false alarm but Danone is attempting to recover lost revenue.

"Danone has always maintained that this affair illustrates serious failings throughout the Fonterra group of companies in applying the quality standards required in the food industry," the spokesperson added.