Nova Chemicals appeals ruling that it pay Dow $1 billion in damages

Nova Chemicals Corp. has appealed an Alberta judge’s order that it pay US$1.06 billion in damages to Dow Chemical Canada in a dispute centred around the operation of a massive ethylene production plant in Joffre, Alta.

Known as E3, the 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.

The Joffre, Alta. facility.

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 that Dow knew about this allocation as it was occurring and failed to object to it.

In June 2018, 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 from 2001 to 2012.

In its appeal, Calgary-based Nova says that the trial judge “fundamentally misapprehended” the project agreements, including the context they were entered into, and that the damages were therefore mistakenly awarded.