Out-of-court dispute settlement talks between Unilever and its subsidiary Ben & Jerry’s about their dispute over Israel have reportedly broken down.

US ice-cream business Ben & Jerry’s announced has filed a lawsuit in the US against Unilever over its parent company’s decision to sell the Ben & Jerry’s operation in Israel.

Now news agency Reuters is reporting talks between the pair to prevent the dispute from being settled in court have broken down.

Quoting an unnamed source, Reuters said the talks did not work out because Ben & Jerry’s does not want to “cave” on its social mission and stance on Palestinian human rights.

The Vermont-based firm, owned by Unilever since 2000, announced in July last year it was to end sales of its products in what it calls Occupied Palestinian Territory (OPT).

Ben & Jerry’s said it would no longer distribute its products in land in the West Bank and East Jerusalem claimed by Palestine but which has been occupied by Israel since 1967.

The decision prompted a backlash from Israel Prime Minister Naftali Bennett and led to accusations of anti-semitism.

Unilever revealed on 29 June it had sold its Ben & Jerry’s business interests in Israel to Avi Zinger, the owner of local licensee American Quality Products for an undisclosed sum. That move led to Ben & Jerry’s taking legal action, claiming the decision violated the two parties’ original merger and shareholder agreement. Unilever denied that this was the case.

Now, according to Reuters, talks to settle the dispute have failed and the issue has been sent back to a federal judge.

However, its source suggested the parties could try again to achieve an out-of-court settlement.

Just Food asked Ben & Jerry’s and Unilever for comment.

A spokesperson for Ben & Jerry’s said the company does not comment on legal matters.