Nordion Inc. (TSX: NDN) (NYSE: NDZ), a leading provider of products and services to the global health science market, has filed an amended statement of claim against Atomic Energy of Canada Limited (AECL) in the Ontario Superior Court of Justice with regards to the Isotope Production Facilities Agreement (IPFA). The claim requests damages in the amount of $243.5 million for negligence and breach of the IPFA, as well as pre- and post-judgment interest and costs.
Nordion and AECL entered into the IPFA on December 31, 1996. The IPFA was entered into to resolve litigation arising from AECL’s aborted MAPLE X10 project, which was intended to replace the National Universal Research (NRU) reactor. The IPFA contained provisions for the engineering, procurement, construction and commissioning of the Dedicated Isotope Facilities and provisions for the supply of and payment for radioisotopes, pending the completion of the new facility and once produced by the new facilities.
In 2008, Nordion filed an initial court claim against AECL and the Government of Canada for negligence and breach of the IPFA in the amount of $1.6 billion, as well as a separate claim in an arbitration under the Interim and Long Term Supply Agreement (ILTSA) which replaced the IPFA in 2006. The majority of the arbitration tribunal ruled 2:1 that Nordion's claim against AECL in the arbitration was precluded under the terms of the ILTSA. Although Nordion was not entitled to a remedy under the ILTSA for the unilateral termination by AECL of the construction of the MAPLE facilities, the arbitration decision left it open to Nordion to pursue the IPFA court claim which was preserved under the ILTSA. Having regard to the majority opinion in the arbitration, the amended statement of claim under the IPFA no longer includes the Government of Canada and the damages claimed are substantially lower. Nordion and the Government of Canada have agreed to the discontinuance of the action against the Government of Canada without costs.