Canadian Plastics

Canadian court orders Nova to pay Dow $1.43 billion judgment

An Alberta court made the ruling related to the companies’ jointly-owned ethylene asset in Joffre, Alberta.

September 24, 2019   Canadian Plastics

An Alberta court has order Nova Chemicals to pay chemical maker Dow more than CAD$1.43 billion (US$1.08 billion) for damages Dow incurred through 2012 related to the companies’ jointly-owned ethylene asset in Joffre, Alberta.

According to a Sept. 23 statement from Midland, Mich.-based Dow, the Court of the Queen’s Bench in Alberta signed the judgment and ordered that Nova pay the damages by Oct. 11

“The court, which initially ruled in June 2018, found that Nova Chemicals failed to operate the ethylene asset at full capacity for more than 10 years, and furthermore, that Nova violated several contractual agreements related to Dow receiving its share of the asset’s ethylene production,” Dow said in its statement. “These actions resulted in reduced productivity and sales for Dow…the signed judgment relates to damages Dow incurred through 2012. Dow anticipates receiving an additional judgment for damages owed by Nova for the post-2012 period.”

The judgment is subject to appeal.

Known as E3, the Joffre facility started operating in 2000 as a joint venture between Nova and Dow, with Nova operating the facility. Dow and Nova claimed and counterclaimed against each other for damages in the hundreds of millions of dollars for the period from 2001 to 2012.

Dow had alleged that Nova took part of the ethylene and other products produced at E3 that belonged to Dow under the terms of the joint venture for its own use. Dow also submitted that Nova failed to run E3 at full rates.

Nova said it faced an ethane shortage and ran the facility as full as it could subject to mechanical issues that constrained production, and that Dow knew about this allocation as it was occurring and failed to object to it.


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