Forestry giant Resolute Forest Products Inc. has hit a setback in its high profile, ongoing defamation suit against Greenpeace and two of its activists.

Resolute is suing the environmental activist organization for damages of $5 million, in addition to punitive damages of $2 million, after it published a report about the company’s logging practices in Ontario and Quebec, which Resolute says contained false and misleading information — some of which Greenpeace retracted and apologize for in March 2013.

Last week, the Ontario Superior Court dismissed what it described as an attempt by Resolute to “greatly expand the scope of the litigation and transform the trial into an inquiry into Greenpeace” as part of an appellant decision initiated by the organization.

In its statement of claim, originally filed in 2013, Resolute asserts that Greenpeace organizations around the world have broken laws in pursuit of its advocacy goals, citing many instances where campaigners and protestors affiliated with the organization were arrested or conducted activity that could be interpreted as criminal, such as in 2014 when protestors scaled the Mount Royal Cross in Montreal to hang banners disparaging Resolute.

However, a panel of appellant judges rejected the admission of this and other arguments, writing “This case is about what Greenpeace published and then did starting in late 2012…. (Resolute has not placed) its own entire history, or even its entire environmental record as a forest products company, in issue.”

The court also called an argument by Resolute that Greenpeace’s raison d’être is to raise money and not to advocate for the causes in publicly campaigns for, “a non sequitur.” In referring to allegations that Greenpeace has a “strategy of distorting the truth … in order to appeal to its donor base” the ruling adds that “there is not a single example of the defendant Greenpeace doing such a thing” — going on to refer to the allegations as “scandalous and vexatious.”

The decision awarded Greenpeace full costs for the appeal.

This development and the trial are significant because the case between Resolute and Greenpeace has led to public debate about the merits of the litigation, with activists claiming it is a brazen example of a strategic lawsuit against public participation — or a suit designed to discourage a party or others from speaking out publicly against a person or organization — and defenders of Resolute claiming it is an important case for affirming a corporation’s right to protect its reputation.

“Environmental and other civil society organizations play a critical watchdog role in our society,” said Shane Moffat, one of the activists being sued alongside Greenpeace, in an interview. “This recent ruling is an important moment as it clearly rejects the legal tactics that Resolute has deployed which would threaten that role.”

However, Resolute spokesman Seth Kursman noted that the company’s “overarching allegation, that Greenpeace refers to and invokes its past campaigns in order to threaten and intimidate Resolute’s customers, remains part of Resolute’s pleading.”

He also added that the court has only dismissed specific examples of Greenpeace’s past campaigns from the pleadings, stating that the “ruling does not permit Greenpeace to run away from its own identity, which is very much a live issue for trial.”

“This Court decision does not in any way diminish the claims against Greenpeace of defamation and intentional interference with commercial relations.”