Calgary Herald

Judge awards Dow Chemical US$1.06 billion in damages

Rival Nova loses legal dispute over ethylene plant

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EDMONTON A judge has awarded Dow Chemical Canada US$1.06 billion in damages against Nova Chemicals Corp. in a dispute over a massive ethylene plant in central Alberta.

The dispute centred around the operation of a production facility in Joffre known as E3.

E3 started operating in 2000 as a joint venture, with Nova running the facility.

Dow Canada alleged breach of contract over the E3 joint venture agreements, claimed that Nova took part of the ethylene and other products that belonged to Dow and failed to run the facility at full production.

Nova said it faced an ethane shortage and ran the facility as full as it could, subject to mechanical issues that constraine­d production.

Justice Barbara Romaine of Alberta Court of Queen’s Bench ruled in favour of Dow and against a countercla­im filed by Nova in a case that included claims and countercla­ims for damages between 2001-12.

“Dow has establishe­d these facts and has proved on a balance of probabilit­ies that Nova has breached the joint venture agreements both as operator and as coowner and has converted some of the ethane that Dow was entitled to from E3,” Romaine wrote in a lengthy redacted judgment released Wednesday.

“I also grant Dow a declaratio­n

(Dow has proved) that Nova has breached the joint venture agreements ... and has converted some of the ethane that Dow was entitled to from E3.

that the conduct of Nova as operator constitute­s wilful misconduct and gross negligence.”

Romaine said Dow establishe­d that there was no ethane shortage, that Nova always had enough ethane to fill E3 and had the ability and freedom to acquire more ethane.

She also said Dow showed that Nova failed to operate E3 to maximize production and that the facility had more capacity than Nova submitted at trial.

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