French food company Danone has lost its legal bid to overturn a High Court decision stalling its legal action against Fonterra.
Danone's products include the Karicare formula range for infants and toddlers. Photo: RNZ
The company was suing Fonterra for damages relating to last year's milk powder botulism scare.
In July, the High Court ruled the companies should attend arbitration in Singapore before any court case, in accordance with their supply agreement.
But last month, Danone's lawyer told the Court of Appeal that could push the company's damages case out to 2018.
In a judgement released today, the Court of Appeal said Fonterra was entitled to avoid having to defend two overlapping cases.
It said Danone would not be disadvantaged as it would still be able to go back to the High Court once arbitration was completed.