A U.S. district judge ordered the arraignment of Agility in the latest step of the prosecution of the Kuwaiti logistics company over charges that it defrauded the U.S. Army in multibillion-dollar contracts.

The order by Judge Thomas Thrash, came on the heels of a decision by a U.S. appeals court that ended about 18 months of legal wrangling over whether prosecutors correctly served the company in its initial indictment in November 2009.

Thrash said in order that he would set a date for the arraignment hearing "expeditiously," according to court documents.

"This is a criminal action. It is before the court on the motion for arraignment of defendants, which is granted," the order said.

It gave no further details, but a legal analyst said months of pretrial motions would probably precede any trial.

Agility was the largest supplier to the U.S. Army in the Middle East during the war in Iraq after 2001's Sept. 11 attacks, with contracts worth around $8.5 billion.

The military fraud case, one of the largest in U.S. history, is politically sensitive in both Kuwait and Washington.

An arraignment hearing typically includes the formal reading of charges and would give the company an opportunity to plead guilty or not guilty.

There was no immediate comment from the company. Previously it said it was in conversations with the

U.S. Department of Justice and was preparing a vigorous defense. The company argues the case involves a civil contract dispute rather than a criminal matter. The government filed a civil suit in January.

In a related development, a grand jury has issued a subpoena for retired General Dan Mongeon, a member of Agility's board, to testify next Tuesday, according to court documents. Mongeon's lawyers contest the subpoena.

The subpoena is evidence that an active grand jury remains in place, which could potentially lead to further indictments in the case.

Mongeon's lawyers said in their filing that a grand jury first subpoenaed the company in March 2008 and also issued subpoenas for 85 food-vending companies that had supplied it -- rare evidence of the scope of the government's investigation in the case.

The case is the United States of America v. the Public Warehousing Company K.S.C. also known as Agility, et al. It is numbered 1:09-cr-00490-TWT -AJB and was filed in the United States District Court for the Northern District of Georgia, Atlanta Division. (Reuters)