Biotech agriculture company Monsanto on Tuesday lost a legal battle over a contract dispute with one of India’s biggest seed producers, Nuziveedu Seeds Ltd. The Delhi High Court ruled that the Hyderabad-based company could continue to use Monsanto’s patented Bt cotton technology as the firm’s termination of its sub-licence agreement with Nuziveedu was “illegal and arbitrary”, mint reported.

Monsanto’s Indian arm Mahyco Monsanto Biotech had sued Nuziveedu Seeds – and its subsidiaries Prabhati Agri Biotech Ltd and Pravardhan Seeds Pvt Ltd – in 2016, accusing it of producing genetically modified varieties of hybrid cotton seeds using Monsanto’s trademarked Bollguard and Bollguard-II technology even after their contract was cancelled in November 2015.

“The parties shall remain bound by their respective obligations under the terms and conditions of the 2015 sub-licence agreements,” ruled Delhi High Court Justice RK Gauba. The judge has also directed Monsanto to slash the royalty payments laid down in the original contract as per the changes introduced in the policy by the Indian government last year, Reuters reported.

The high court observed that Monsanto had not considered Nuziveedu’s request to alter the royalty payable under the 2015 deal, not upheld its contractual obligation and levied a trait fee higher than that permissible under Indian laws. Last year, the Centre had reduced the royalties payable by Indian firms for Monsanto’s Bt (Bacillus thuringiensis) seeds by around 70%.