MilitarySuper is fighting a legal battle against one of its Australian share investment managers, Melbourne-based hedge fund manager Agora Asset Management, over an $8 million exit fee.

According to court documents filed with the Supreme Court of Victoria last month, MilitarySuper issued a formal redemption request in May for its more than $150 million in assets invested in the Agora Absolute Return Fund II after it had become "dissatisfied" with the fund's performance.

But the industry fund tried to withdraw its redemption application after it was told it would incur an exit fee of 5 per cent.

"This document [the application] confirmed the order to redeem shares of an estimated value of $152,181,222.03 incurring estimated charges of $7,885,878.74 with the note 5 per cent withdrawal fee applies," Justice John Dixon stated in the documents.

"There is a dispute about when this matter first came to the attention of Military, perhaps arising from the fact that there is no evidence of a clear, direct communication from the trustee about that specific exit fee being applied to the redemption at or prior to this time."

Agora claimed it had provided the super fund with the necessary information in November last year, when it amended its information memorandum.

"Where there had been a single entry for contribution/withdrawal fee, the information memorandum now provided that such fees might be 'up to 5 per cent of the application monies/withdrawal proceeds, at the absolute discretion of Agora' in each case," Dixon said.

But MilitarySuper claimed the extent of the exit fee had not been made sufficiently clear.

The super fund tried to cancel its redemption request after it was told of the 5 per cent fee, but Agora has denied this request.

The stakes are high for Agora, as the court documents showed MilitarySuper was by far the largest investor in the fund.

"The significance of the proposed full redemption by Military can be highlighted by noting that Military's investment in the fund has an approximate estimated value of $160,000,000. There is one other investor, about which no information is provided, with an estimated investment of $250,000," Dixon said.

MilitarySuper chief executive Michael Seton and Agora managing director Peter Apostolopoulos, who is also the sole director of Agora, have met several times this year to discuss a solution to the issue, but have so far been unsuccessful in resolving it.

The case is continuing and Dixon ordered that the status quo as it existed prior to these dispute proceedings should be maintained until trial or earlier order.

This means Agora is not allowed to process the redemption yet.

Apostolopoulos told InvestorDaily he could not comment on the case.

MilitarySuper was also unavailable for comment.