Fonterra and Danone will head into arbitration in Singapore next week in a bid to thrash out a financial agreement over the 2013 whey protein botulism contamination scare.
Danone recalled its milk formula products in New Zealand, Singapore, Malaysia, China, Hong Kong, Vietnam, Cambodia and Thailand, after Fonterra announced in August 2013 that its whey protein products could be contaminated with botulism, which later turned out to be a false alarm.
Danone as a result alleged that Fonterra breached the Fair Trading Act and is now separately seeking more than $950 million in compensation in the New Zealand High Court, while Fonterra says its liability is limited to $30 million.
Since the scare, Danone has also cancelled supply agreements with Fonterra. Its High Court action has been delayed until after the arbitration, according to the New Zealand Herald.
In 2014, Danone said New Zealand High Court proceedings, as well as arbitration proceedings in Singapore aim “to bring all facts to light and to obtain compensation for the harm it has suffered”.
Fonterra said at the time that it continued “to be confident in its position and will vigorously defend any proceedings”.
