The council and Southwest Research Institute were engaged by a New Jersey-based company, Nanotech Industrial Solution, to be involved in testing of NanoLub products.

Now a Sydney-based company, Nanotek Pty Ltd, that signed on in 2017 to distribute the products in Australia, New Zealand and Papua New Guinea, is taking legal action claiming the US company made false representations about the effectiveness of its products.

The NSW Supreme Court heard this month that the tests at Singleton Council and Southwest Research Institute allegedly demonstrated the additives reduced fuel consumption and emissions.

The test results were supplied to the Sydney company before it agreed to enter into the distribution deal.

But it is alleged that when the Sydney-based company ordered further testing on the products, after entering into the deal, it received different results.

It has now taken legal action in New Jersey alleging the US company made false representations about its products.

In response, the US company denied it acted fraudulently, and counter-sued the Sydney company for breach of contract.

The matter landed before the NSW Supreme Court this month, where Justice Stephen Rothman was asked by the US company to issue subpoenas to two Australian men, Jim Ellison and Max Rudman, requiring them to give evidence and produce documents about their knowledge of the products.

Information requested includes the testing conducted at Singleton Council.

The court heard Mr Rudman is a director of the Sydney company and Mr Ellison was employed by it to market and distribute the fuel additives.

Justice Rothman agreed to the request and appointed Sydney barrister James Emmett to oversee the process that will involve a confidential examination of both men by lawyers for the US company next year.

While you're with us, did you know the Newcastle Herald offers breaking news alerts, daily email newsletters and more? Keep up to date with all the local news - sign up here

IN THE NEWS: