WELLINGTON, New Zealand--French food giant Danone SA (BN.FR) has been awarded 183 million New Zealand dollars (US$125 million) from the world's largest dairy exporter, Fonterra Co-Operative Group Ltd. (FSF.NZ), after an arbitration process in Singapore.
Danone issued a statement on Friday announcing that it had been awarded damages, to be paid immediately by Fonterra, for costs suffered as a result of a product recall in 2013.
Continue Reading Below
Fonterra issued the recall as a precaution after saying some of its whey protein concentrate might have put consumers at risk of a potentially fatal botulism disease, though this turned out to be a false alarm.
Danone canceled supply contracts and took legal action against Fonterra in Singapore and New Zealand, seeking damages of more than NZ$900 million, though New Zealand court action was deferred pending the outcome of the arbitration in Singapore.
On Friday, Fonterra requested a trading halt, saying the outcome of the arbitration was expected.
"We are disappointed that the arbitration tribunal did not fully recognize the terms of our supply agreement with Danone, including the agreed limitations of liability, which was the basis on which we had agreed to do business," Fonterra Chief Executive Theo Spierings said in a statement.
"The decision to invoke a precautionary recall was based on technical information obtained from a third party, which later turned out to be incorrect," he said.
Shares in the Fonterra Shareholders Fund, the listed arm of the dairy co-operative, last traded at NZ$6.37, and were marginally higher after being released from the trading halt.
Write to Ben Collins at firstname.lastname@example.org
(END) Dow Jones Newswires
November 30, 2017 20:47 ET (01:47 GMT)