Petrol giant BP’s bid to dump its deal to promote the frequent flyer program of the country’s No. 2 airline Virgin Australia has hit a snag.

The spat is now to play out in court in September – many months after BP wanted the agreement quashed.

The court battle between BP Australia and Velocity Frequent Flyers, which operates Virgin’s frequent flyer program, has been listed for trial in the Brisbane Supreme Court for three days starting on September 5.

BP Australia was appointed Velocity’s program partner for three years from April 2015, court filings state, allowing Velocity members to earn points from purchases at BP stores.

Velocity said the agreement was “critical” to its strategy and business performance. “Velocity has invested significantly in the contract and, to date, it has been commercially successful for both parties.”

The court battle was triggered by BP agreeing in late 2016 to pay $1.8 billion to buy, rebrand and operate Woolworths’ 527 fuel and convenience sites, and seeking to terminate its agreement with Velocity, effective June 30, 2017.

Woolworths’ stores have an agreement with Virgin Australia’s arch rival, Qantas.

Velocity then argued the BP-Woolworths deal breached BP’s exclusivity obligations.

BP was “not entitled to give the purported termination notice and the purported termination notice is therefore invalid,” it stated in court documents. “On that basis, BP is not entitled to terminate the agreement with effect from 30 June 2017.”

Mediations between the parties failed twice. BP and Velocity’s lawyers were contacted for comment.

Extracted from Border Watch.