$2.7 Billion Arbitration Award for Kraft Foods Group/Mondelez International Inc.

November 13, 2013

An arbitration ruling on November 12, 2013, determined that the firm’s client Kraft Foods Group/Mondelez International Inc. must be paid more than $2.7 billion in cash by Starbucks Coffee Company, concluding a lengthy breach of contract dispute. The award includes $2.23 billion in damages and $527 million in interest plus attorney’s fees.

Starbucks unilaterally terminated its agreement in November 2010 before its 2014 expiration, cutting off Kraft’s exclusive rights to sell, market and distribute Starbucks roast and ground coffee in grocery and other retail outlets.  Kraft immediately initiated arbitration proceedings to challenge the contract’s improper termination.

Kraft’s Separation and Distribution Agreement from its spinoff from Mondelez International Inc. in October 2012 confirmed that the award proceeds will go to Mondelez.

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