The embattled Canadian Wheat Board has been ordered by a Manitoba court to pay more than $4.6 million to an Italian company, in a wheat sale case dating back to the 1980s.

In a written decision obtained by CBC News, the Manitoba Court of Appeal says the wheat board must pay Pagnan, an Italian grain-trading firm, and an exporter about $4.64 million in damages for selling it lower-quality wheat in 1982.

The board argued that the customer knew 1982 was a bad crop year, due to widespread frost in August that had damaged a high proportion of that year's wheat crop.

However, the court disagreed. In its ruling, dated Wednesday, the wheat board was found guilty of negligent misrepresentation in the sale.

Canadian Wheat Board chairman Allen Oberg was not available to comment on Thursday. A spokesperson told CBC News the board is considering legal options, which could include appealing to the Supreme Court of Canada.

This week's legal loss could not have come at a worse time for the wheat board, which is battling with the federal Conservative government over its future.

Bill C-18, a government bill that aims to strip the wheat board of its monopoly over Prairie wheat and barley sales, passed through the Senate on Thursday evening. It could receive royal assent as early as Friday.

On Wednesday, the wheat board filed an application with the Manitoba Court of Queen's Bench, asking that Bill C-18 be ruled invalid.

The board has also asked the court for an injunction to suspend progress of the bill until the case is heard.

With files from The Canadian Press