ADM Archer Daniels Midland Company

Syngenta AG sued several grain-trading firms over losses some U.S. farmers say they sustained after China rejected shipments of genetically modified corn, escalating a legal battle over the way biotech seeds are introduced to farm fields.

The lawsuit, filed late Thursday in U.S. District Court in Kansas, stems from a legal dispute that arose last year when grain companies and farmers sued Syngenta, arguing the company should compensate them for lost sales and depressed corn prices that they claim arose from the rejected shipments.

The Swiss seed and pesticide giant, which is contesting those allegations, argued in the new lawsuit that big grain merchants, including Cargill Inc. and Archer Daniels Midland Co., should be on the hook for losses that crop producers say they are due in the matter.

"We don't think there is any liability here, but to the extent there is, at a minimum, the lion's share of the duty falls on the grain trade," said Michael Jones, a lawyer for Kirkland & Ellis LLP representing Syngenta in the matter.

Representatives for ADM and Cargill had no immediate comment.

Syngenta in 2011 began selling a new variety of biotech corn seeds—called Viptera and engineered to resist pests—to farmers in the U.S., Argentina and Brazil after those governments granted approval for its cultivation. In late 2013, Chinese officials began turning away shipments of U.S. corn bound for Chinese ports after detecting the Syngenta strain, which the country had yet to approve for import.

Last year, Cargill sued Syngenta over the corn, alleging that Syngenta's decision to market the seeds without first securing Chinese import approval cost the Minnesota-based agribusiness $90 million when Beijing began rejecting corn shipments.

Other grain shippers, including Archer Daniels Midland Co., also sued Syngenta. The grain firms' cases touched off a wave of separate lawsuits filed by farmers across the country, who argued that they too lost money because China's rejections of U.S. corn shipments depressed the overall price of corn by closing off a key market.

Syngenta has defended its move to sell the seeds, saying it followed the law, was fully transparent and provided to farmers a valuable new tool for defending their crops against insect pests.

The judge for the U.S. District Court for the District of Kansas, who is handling the farmers' lawsuits, in September ruled that the farmers can bring legal claims against a seed company over its duty to ensure that any biotech seeds don't damage other players in the "interconnected" U.S. corn supply chain.

That ruling allowed the farmers' case against Syngenta to move forward. But Syngenta's new lawsuit argues that it also places responsibility on the grain traders, as participants in the grain market, to shield farmers and other players against the same potential economic damage that could arise if shipments are rejected for containing unapproved biotech traits.

If the judge determines the farmers are due damages, Syngenta's lawsuit argues that Cargill, ADM and two smaller grain companies should bear some or all of the liability. Syngenta could add additional grain companies to the lawsuit, Mr. Jones said.

Write to Jacob Bunge at jacob.bunge@wsj.com

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(END) Dow Jones Newswires

November 20, 2015 01:15 ET (06:15 GMT)

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