The merger between InterOil Corp. (IOC) and ExxonMobil Corp. (XOM) has been put on hold by a Canadian appellate court in the Yukon territory amid claims the merger is unfair to shareholders.

InterOil founder, Phil Mulacek, filed the lawsuit, saying the terms of the deal were not properly remunerating shareholders. Mulacek holds about 5% of InterOil’s shares, plus smaller amounts held in trusts.

The deal was approved in July 2016 by the Supreme Court of Yukon, where InterOil is registered, and is valued at $2.5 billion. Shareholders approved the deal, with about 80% voting to approve. (See also: ExxonMobil to Buy InterOil for Over $2.5 Billion.)

Mulacek has been fighting the board since his retirement as CEO in November 2013. Since his retirement, InterOil's stock price has fallen about $35 per share, which he blames on poor management decisions and undervalued asset sales. At the annual shareholders meeting in June 2016, Mulacek attempted to place five of his own people on the board and get shareholders to reject the eight nominees. That proposal failed.

In its latest ruling, the Court of Appeal of Yukon overturned the lower Supreme Court's decision, saying the InterOil board may have failed in its fiduciary duties to provide proper disclosure of the Exxon proposal. “We argued to the Court of Appeal that these flaws seriously undermined both the shareholder approval and overall fairness of the Exxon proposal, and the appeal court agreed,” Mulacek said.

Through the merger, ExxonMobil stands to gain interests in six licenses that provide access to about 4 million acres of natural gas fields in Papua New Guinea, where InterOil in located. The fields could hold up to an estimated 2 billion barrels of oil equivalent, which is 10% of Exxon’s current reserves. This ruling stalls access to those fields, as well as the commercial negotiations around the area’s second-largest liquid natural gas processing plant. (See also: Why are Oil Co’s Q3 Earnings Expectations So Bad?)

As Exxon seeks to add valuable new natural gas assets to its portfolio, the former chairman fights to gain some measure of transparency and fairness around this deal. The two companies must return to the discussion table and consider extending the outside date and possibly file another appeal with the Supreme Court of Canada.

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.