Cadbury Nigeria, the confectioner and drinks maker, has hit out at allegations by Nigerian regulators that it imported chocolate labelled with deliberately misleading safety and quality information.

The company, which is 46 per cent owned by UK-based Cadbury Schweppes, says legal action launched by the National Agency for Food and Drugs Administration and Control (Nafdac) breaches a settlement agreed by the two parties.

The case, which comes after a dispute over labelling between the Nafdac and Nestle of Switzerland last year, highlights multinational companies' sensitivity over reputation issues involving regulators in less industrialised countries.

Wole Olufon & Co, Cadbury Nigeria's lawyers, said the company thought it had reached an agreement over the Nafdac complaint, which is due to come to court later this week and relates to a shipment of Dairy Milk and Fruit & Nut bars from India this year.

Wole Olufon said it was surprised to see the court action continuing as Cadbury had paid an "administrative penalty" of N800,000 (€6,327) for "perceived infringements", which it had agreed with the Nafdac would settle the case.

"Curiously, the agency has denied ever reaching any agreement with Cadbury Nigeria for an amicable resolution of the issues," Wole Olufon said.

The court action of Nafdac, which declined to comment, took a twist last month after a judge issued a warrant for the arrest of Bunmi Oni, Cadbury Nigeria's chief executive.

Cadbury Nigeria has a reputation for ethical business practice and is one of the largest listed companies in the country, which has relatively little foreign investment outside the oil sector.

Cadbury Schweppes, which increased its stake in Cadbury Nigeria from 40 per cent to 46 per cent this year, declined to comment on the case, but said it tried to follow regulations worldwide without exception.

Nestle said it had resolved its dispute with the Nafdac.