us judge throws out awb corruption case

A US federal judge has thrown out a class action brought against the Australian Wheat Board (AWB) by US wheat growers.

The farmers were claiming at least $US10 million ($10.8 million) in damages relating to AWB's wheat sales to Iraq under the corrupt United Nations Oil for Food Program.

An Australian inquiry found that almost $300 million in payments concealed in Australian wheat contracts went to the former Iraqi government in breach of UN sanctions.

In their submission to the court, the American farmers claimed AWB's actions had injured them by causing the domestic price of wheat to drop.

In rejecting the class action, Judge Gerard Lynch ruled that the decrease in exports to Iraq was only 1 per cent of the US's total wheat exports, and less than 0.2 per cent of worldwide wheat trade.

"Plaintiffs thus cannot show that AWB's conduct in Iraq was a 'proximate cause' of their injury, a required element of antitrust standing," he wrote in the order.

The judge also said the plaintiffs were not in a position to sue under antitrust laws, because their injury was "at best, merely 'derivative' of the direct injury" suffered by US farmers who were trying to sell wheat to Iraq.

"Their claims would also engender difficulty in identifying and apportioning damages between directly victimized wheat exporters and indirectly affected wheat farmers," Judge Lynch wrote.

AWB spokesman Peter McBride says there have been no suggestions of an appeal against the decision so far.

"We always stated that the case was ill conceived and we would vigorously defend it," he said.

"We're obviously pleased with the decision by the court. The complainants still have the avenue of appeal, but we've had no indication of that as yet."

AWB Limited shares were up about 5.5 per cent after the news.