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Court orders recalculation of USD1.4 billion in damages in lawsuit between Dow and Nova Chemicals

September 22/2020

MOSCOW (MRC) -- The Alberta Court of Appeal has ordered a recalculation of a decision that awarded USD1.4 billion in damages to Dow Chemical Canada in a dispute with Nova Chemicals Corp, said Canplastics.

As is being reported by The Canadian Press, the appeal court agreed with the original judge who ruled that Dow was correct in its interpretation of an operating agreement for a jointly owned ethane cracker at the Joffre petrochemical complex in central Alberta.

The cracker, one of three at the complex and dubbed E3, was built by Nova and Union Carbide through a 1997 joint venture agreement and designed to supply ethylene feedstock for a new polyethylene plant being built by Union Carbide. In 2001, Dow merged with Union Carbide in 2001 and took over its half ownership of the ethane cracker.

Dow argued that the Joffre petrochemical complex had been operated by Nova at less-than-agreed-upon volumes for a 10-year period until 2012.

"The Court of Appeal of Alberta affirmed the trial court�s ruling that E3 must be run to its full productive capability, and that Nova committed gross negligence and wilful misconduct in failing to do so,� Dow spokeswoman Ashley Mendoza said in an email to The Canadian Press. "The trial court�s finding in Dow�s favour on Nova�s liability has been affirmed, as has its ruling on the great majority of Dow�s damages through 2012."

The appeal court found that the trial judge�s inclusion of lost polyethylene profits from the lack of ethylene production was improper and Dow should only be compensated for direct damages, to be calculated by the trial court.

"We are pleased with the appellate court�s decision on our appeal, and we look forward to continuing to improve the ongoing operations and relationships at our world-class Joffre facility," Nova spokeswoman Jennifer Nanz said in an emailed statement to The Canadian Press.

According to MRC"s ScanPlast report, Russia"s overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
Author:Anna Larionova
Tags:petroleum products, PP, PE, petrochemistry, Dow, Nova Chemicals.
Category:General News
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