Ben & Jerry's
Ben & Jerry's iStock

Ben & Jerry’s and its parent company Unilever did not reach an out-of-court agreement on a dispute over the sale of the ice cream maker’s Israeli business to a local licensee, Reuters reported, citing a source with direct knowledge.

With that, the issue will be sent back to a federal judge.

Unilever caused an uproar last year when it announced that it will stop selling the Ben & Jerry’s ice cream in Judea and Samaria.

However, in late June, Unilever reached a deal to sell the rights to Ben & Jerry’s ice cream in Israel, circumventing its own boycott of Israeli towns in Judea and Samaria.

Under the new arrangement, Unilever has sold its Ben & Jerry’s business interests in Israel to Avi Zinger, the owner of American Quality Products Ltd., the current Israel-based licensee.

The ice cream will be sold exclusively under Ben & Jerry’s Hebrew and Arabic names in Israel – including Judea and Samaria.

While Israeli leaders lauded the decision, Ben & Jerry’s condemned the move, declaring Judea and Samaria “Occupied Palestinian Territory”.

On July 5, Ben & Jerry’s sued Unilever in a bid to block the sale of the Israeli business to Zinger, saying Unilever had guaranteed Ben & Jerry's the right to protect its brand when buying the company in 2000.

Unilever countered that it was "fully empowered" to conduct the sale, which could not be undone because it has already closed.

Ben & Jerry’s and Unilever agreed earlier this month to try to reach a deal out-of-court by July 28. However, a source quoted by Reuters said the talks did not work out because Ben & Jerry’s does not want to “cave” on its social mission and stance on Palestinian human rights.

(Israel National News' North American desk is keeping you updated until the start of Shabbat in New York. The time posted automatically on all Israel National News articles, however, is Israeli time.)