Nuix (ASX:NXL) on Monday lost an appeal in Australia's Federal Court in a case where it challenged retention rates charged by Berkshire Hathaway Specialty Insurance and other insurers in relation to two policies of liability insurance.

Nuix claimed that a AU$2.5 million retention was applicable to cover legal bills related to class actions and an investigation into the company by the Australian Securities and Investments Commission.

However, the primary judge in the case ruled that under the terms of the company's insurance arrangements, the insurers should receive a higher AU$10 million deductible across the consolidated claim when multiple claims are combined.

The Federal Court upheld that judgment and said it will order Nuix to pay legal costs for the defendants.

Nuix declined to comment on the ruling.

The company's shares gained 3% in recent Tuesday trade.