FedEx is accusing the Newfoundland Liquor Corporation of a set-up, saying the provincial crown corporation engaged in underhanded business in order to protect its monopoly over wine in the province.
Two years ago, the NLC charged FedEx for bringing a private shipment of wine from British Columbia into the province.
Private wine shipments from outside Newfoundland and Labrador are illegal, according to provincial regulations. Couriers, however, are exempt from federal restrictions on interprovincial liquor shipments.
In court Friday, Crown prosecutor Sheldon Steeves admitted there was no case and asked to withdraw the charge.
However, the lawyer for FedEx, Scott Maidment, asked for the charge to be dropped altogether.
He also requested the NLC pay $155,000 for FedEx's legal costs.
NLC person ordered wine, FedEx says
Maidment said there is evidence that a NLC agent ordered the shipment under his wife's name. He said the corporation was trying to bully FedEx into compliance, and said it forced FedEx to pay unnecessary legal expenses.
The NLC directed requests for comment to the provincial government.
Finance Minister Ross Wiseman said he was aware of the case, but that government had no involvement in the decision to charge FedEx.
"I'm not in a position to comment about whether their approach was appropriate or not. I'm not aware of how they went about doing it, actually," he said.
Wiseman said restricting interprovincial liquor shipments is an important source of revenue and that there are no plans to change the laws.
Judge Mike Madden ordered that the charges be dropped. He will rule on the legal costs at a later date.