ASIC alleged FMG had engaged in misleading and deceptive conduct by overstating the substance of agreements with three Chinese companies in announcements made to the market and investors in 2004, relating to developing a mine, railway and port for the mining and export of iron ore from the Pilbara.

The corporate watchdog also alleged that Forrest breached his duty as director of FMG to exercise care and diligence under the Corporations Act.

ASIC was seeking penalties of up to $A6 million from FMG and $4.4 million from Forrest, and asked the court to consider disqualifying Forrest as a director.

The case was deliberated on for several months and eventually dismissed by Justice John Gilmour after no basis to make charges of dishonesty and deception against FMG and Forrest was discovered.

Yesterday ASIC filed its notice of appeal with the Western Australian registry of the Federal Court.

ASIC said the case raised important issues concerning a listed entity’s obligations to disclose information under the Australian Securities Exchange rules and the Corporations Act.

It said in a statement that Justice Gilmour's findings also raised important issues as to the proper interpretation and application of provisions of the Corporations Act, and the issues warranted review by an appeal court.

Fortescue chairman Herb Elliott said the company and Forrest were disappointed with ASIC’s decision to appeal.

“While we recognise ASIC has a legal right to appeal, the judgement was unequivocal in our favour,” Elliott said.

“It is disappointing that, after nearly three years of legal proceeding which concluded in a strongly worded judgement in favour of the defendants, ASIC has still elected to pursue the company and Mr Forrest.”

Elliott said the company and Forrest have prepared their respective legal teams to maintain the same “vigorous defence” during the appeal process.

A date has not been set for the appeal to be heard.

FMG shares were 12c lower at $4.86 in morning trade.