The PeopleSoft/Oracle battle continues apace, with a judge rejecting an agreement that PeopleSoft had come to with its own shareholders following their complaints about how it was fending off Oracle's advances.

PeopleSoft agreed to make changes to its "customer guarantees" in May after shareholders took exception with its approach to the unsolicited Oracle bid. Most notably, it agreed to leave key decisions in the hands of independent directors.

However, when Oracle increased its bid from $21 to £24 those shareholders filed a new lawsuit, claiming that circumstances had changed. When that lawsuit appeared in court, Judge Leo Strine decided to simplify matters by rejecting the original settlement altogether.

This is yet another blow to the PeopleSoft Board's efforts to ward off Oracle, following last week's news that over 60 percent of PeopleSoft shares had been tended to Oracle. Despite the clear vote in favour of the takeover, PeopleSoft's Board rejected it, saying the price was too low. In reality, the bitterness between the two companies' execs is so intense that it is unlikely to ever agree to an Oracle takeover.

Judge Strine also scheduled further hearings on Oracle's case against PeopleSoft for mid-December regarding the "poison pill" anti-takeover measures the Board had voted in.

Legal experts say, based on past precedent, that it's unlikely Judge Strine will void PeopleSoft's defenses. The Board nevertheless is under intense pressure to back down following the shareholders' decision to go with the takeover.

Oracle's best shot at getting PeopleSoft if its Board refuses to budge is by replacing the Board itself when the directors come up for election at PeopleSoft's annual general meeting sometime between March and May next year.