Freedom Foods looses appeal, will face US arbitration – The Australian Financial Review

We viewed Freedoms Australian lawsuit as a strategic attempt to obstruct Blue Diamond from availing itself of its contractual right to arbitrate its claims against Freedom, said Michael Donner, Blue Diamonds counsel in the California arbitration.

We are grateful that the Federal Court of Australia rejected Freedoms arguments, validated the enforceability of Freedoms contractual promise to arbitrate, and rendered its decision in such a timely and efficient manner.

Last September 25, Blue Diamond sued Freedom for fraud and breach of the parties licence and distribution agreement in an American Arbitration Association arbitration in Sacramento, California.

Blue Diamond contends in that proceeding that Freedom contractually promised to faithfully make and promote its products in Australia and New Zealand and to not compete with Blue Diamond in those territories.

It alleges that Freedom subsequently breached the agreement by competing directly with multiple lines of Freedoms own nut-based beverage products, including MilkLab.

Freedom Foods last week completed a major $265 million recapitalisation, capping off a horror year when it was forced to restate several years of financial records; it took $590 million in write-downs and flagged the prospect of fraud following a nine-month suspension from trade. It is also facing two investor class action claims.

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Freedom Foods looses appeal, will face US arbitration - The Australian Financial Review