A U.S. appeals court has upheld a $4 million judgment in favor of an El-Salvador based CBD oil supplier that accused its Florida distributors of breach of contract.
The decision Tuesday from the 11th Circuit Court of Appeals affirmed a decision from an arbitration panel the ruled in favor of Cromogen Biotechnology Corporation an all issues and awarded the $4 million judgment.
Cromogen entered into a distribution agreement on June 2014 with Earth Science Tech Inc., a company that distributes CBD-rich hemp oil throughout the U.S., according to the court. It took just months for their relationship to sour, according to the court, and each side filing breach-of-contract claims.
Earth Science called the award excessive and asked a district court to vacate or modify it. Earth Science also argued that tort claims were not arbitrable. The district court ruled against Earth Science on both matters.
Earth Science had canceled its distribution agreement with Cromogen on August 2014, saying the first two deliveries from Cromogen were not pure CBD oil. Cromogen disagreed and accused Earth Science of failing to pay the second half of the amount owed for the two shipments.
