Fonterra is still hoping it can reach a commercial solution with the French food group Danone, over its compensation claim.
Danone, which sells infant formula, says it lost 350 million euro from Fonterra's contamination scare and subsequent product recall in August.
Fonterra's chief executive Theo Spierings told Nine to Noon he put a commercial proposition to Danone when he was in Europe in October - but still hasn't had a formal response.
I'm in the dark at the moment. I hear all kind of signals from senior management of Danone that they might be going to arbitration, so I don't know where we're going, are we going for a commercial solution or are we going for a legal solution?"
Mr Spierings says a commercial solution would solve the problem by re-negotiating contracts with clients and offering them more future value.
Mr Spierings says that is a win-win situation for Fonterra and its customers and preferable to a legal solution.
"I have to go to my lawyers and to the contract and from my lawyers and the contract I can clearly hear and see that our liability is very, very minimal if not zero."
The first two parts of a three-pronged Government inquiry into the Fonterra botulism scare are due to be released before Christmas.