Nordion Announces Decision In Arbitration With AECL Over Cancelled MAPLE Project
Nordion Inc. (TSX: NDN) (NYSE: NDZ) announced today that it has received the decision in the confidential arbitration with Atomic Energy of Canada Limited (AECL). Nordion was unsuccessful in its claim for specific performance or monetary damages relating to AECL’s cancelled construction of the MAPLE facilities. The majority of the tribunal ruled 2:1 that Nordion’s claim against AECL in the arbitration was precluded under the terms of the 2006 Interim and Long-Term Supply Agreement (ILTSA) between Nordion and AECL. Thus, Nordion was not entitled to a remedy under the ILTSA for the unilateral termination by AECL of the construction of the MAPLE facilities.
The arbitrators dismissed AECL’s counterclaim against Nordion, which claimed damages for breach of contract in the amount of $250 million and other relief.
Under the ILTSA, commercially reasonable efforts are required to maintain isotope production from the NRU reactor until such time as Nordion has established a satisfactory, long-term alternative supply. This supply is important to the global healthcare system and Nordion’s Medical Isotopes business.
“We began this process to protect the interests of patients, the nuclear medicine community, our customers and employees with the goal of obtaining a long-term, safe supply of medical isotopes,” said Steve West, Chief Executive Officer, Nordion. “We are disappointed with the outcome of the arbitration. It was our clear objective to protect our shareholders’ investment in the MAPLE facilities. We intend to fully examine the implications of the decision and assess options for our future courses of action regarding this matter and long-term supply.”The MAPLE facilities were the nuclear reactors and processing facility that were being constructed by AECL to serve as the source of Nordion's long-term medical isotope supply. Nordion served AECL with a notice of arbitration proceedings on July 8, 2008, after AECL and the Government of Canada unilaterally terminated the construction and commissioning of the MAPLE facilities. Nordion sought to compel AECL to complete the commissioning of the MAPLE facilities or pay damages in lieu.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts