Initial Catering Supplies Ltd, which lost the contract in January 1995 and brought the action, said the council gave an unfair advantage to those companies offering a 'sandwich-plus' service.
It said the council offered the sandwich companies an indemnity against having to employ existing staff at the same pay and conditions when a contract is transferred as stipulated under European rules.
The company accused the council of flouting its own rules to abide by the simple majority vote of its schools' preferences. The vote was 33 schools wanted hot meals, 32 wanted 'sandwich plus'.
Mr Justice Scott Baker, who declared the company's complaints 'arguable', recognised the urgency of the case and ordered that it take priority in court lists so it can be heard as soon as possible.