A proposed CAD 51 million (€33.8 million/$39.5 million) expansion of a Mowi-owned smolt hatchery in Eastern Canada hit a roadblock Thursday after a supreme court judge ruled the project should be subject to a more rigorous environmental assessment.

NGO Ecojustice filed a lawsuit challenging Newfoundland and Labrabor Minister of Municipal Affairs Derrick Bragg's decision to allow the hatchery expansion of Mowi's Indian Head Hatchery expansion in Canada in April, arguing the plan should not go forward without further environmental scrutiny.

In his ruling in favor of Ecojustice, Newfoundland and Labrador Supreme Court Justice Daniel Boone called on the province to strengthen its regulatory approach to aquaculture in Newfoundland and Labrador, and ensure projects are subject to a "robust and comprehensive environmental assessment."

The ruling does not mean the expansion is off the table, Mowi spokesperson Jason Card told IntraFish in a statement, and in fact would "only result in a minor delay."

Mowi has faced significant challenges in the province over the past year. In September, the company reported that as many as 1.8 million farmed salmon died due to higher than normal temperature, later revising the figure to a total of 2.6 million fish.

Following the die-off, Newfoundland Minister of Fisheries and Land Resource Gerry Byrne announced he was suspending 10 farming licenses of Mowi Canada East's Northern Harvest operations.

Mowi's fourth-quarter earnings took a significant hit from the incident. The company's earnings before interest and taxation (EBIT) fell 22 percent to €165.7 million ($180 million) in the quarter, despite rising revenues and record harvests.

Canadian operations ran at a loss per kilo of €0.53 ($0.58) as a result of the losses.