Grocery Logistics, a subsidiary of Centura Food, formerly RHM Foods, claims the Manugistics software - Manugistics Transportation Planning and Manugistics Intelligent Messenger - was unsatisfactory and did not live up to predictions in the contract.
The dispute is the latest in a string of high-profile legal disputes between users and software suppliers. Last month Computer Weekly revealed that WH Smith is suing Siemens and Fujitsu Siemens for $4.5m after the troubled roll-out of an SAP R/3 enterprise system.
Jack McEvoy, general manager and director of Grocery Logistics, said, "We feel very strongly about the failed implementation but this is a difficult decision. At what point do you just cut and run and put it down to experience? And at what point do you pursue it to receive some recompense?"
Manugistics denies the allegations and a High Court hearing has yet to be scheduled.
The Manugistics system was intended to replace an existing manufacturing package, which was not Y2K compliant, in time for May 1999 and the start of the financial year. The contract was signed in 1997 but the system was technically unstable, produced regular error messages and sometimes crashed, Grocery Logistics claim in legal documents.
The planned implementation of the Manugistics system was never completed and Grocery Logistics broke off discussions with Manugistics, installing an alternative bespoke transport system from Vorsprung.
Manugistics denied the claims made by Grocery Logistics and said that its defence is "meritorious".