Courier company FedEx lost its court battle in St. John's Thursday, seeking funds from the Newfoundland and Labrador Liquor Corporation to cover the cost of prosecution.

The NLC laid charges against the company in 2013 after FedEx shipped wine into the province from British Columbia.

However, couriers are exempt from federal restrictions on interprovincial liquor shipments.

Earlier this year, a provincial Crown prosecutor dropped the charge against FedEx, admitting there was no case.

FedEx was seeking $145,000 from the NLC to cover the company's court costs.

Scott Maidment, the lawyer for FedEx, alleged there was evidence to suggest the NLC had arranged a set-up and was trying to bully FedEx into compliance.

Scott Maidment FedEx lawyer for shipping liquor NLC

Scott Maidment, lawyer for FedEx, says the case may serve as an example of why liquor monopolists shouldn't go after couriers for shipping across provincial borders. (CBC)

"This was a case where the charges were laid based on a sting operation that was, we say, motivated to protect a monopoly," he said.

"Then the charges were dropped as soon as it became clear that FedEx was going to make a credible sound constitutional argument because we believed that the charge was unconstitutional."

FedEx was seeking to be reimbursed for its legal costs on this basis, but Judge Michael Madden said there were no special circumstances that would allow for the awarding of costs, and this case was in no way a malicious prosecution.

According to Maidment, federal laws exempt common carriers from restriction around cross-province shipping of liquor.

He added the company was disappointed by Thursday's decision to not award costs, but the requirements weren't met.

"We would have liked to have an even stronger message sent to the NLC regarding its conduct," said Maidment.

"The court is under restraints basically in terms of awarding costs in criminal matters, these are rare. The judge found that the special circumstances just weren't met in this case."

As for what the ruling means for the long-term, Maidment said he hopes companies realize there isn't a basis for penalizing couriers.

"I think it means that liquor monopolists in Canada will recognize that trying to protect their monopolies by penalizing common carriers is just not the way to go," said Maidment.