Dow Chemical wins $1 billion judgment against Nova Chemicals

Dow Chemical won a round in one of two big lawsuits against Nova Chemicals. A Canadian court has issued a judgment of $1 billion in Dow’s favor in litigation over Nova’s conduct in running an ethylene joint venture between the two companies in Joffre, Alberta.

Before the Court of Queen’s Bench, Dow alleged that between 2001 and 2012, Nova siphoned off more than its fair share of ethylene from their venture and that it ran the facility at lower operating rates than it should have.

Nova said it was justified in taking the ethylene that it did and that the lower operating rates were due to feedstock shortages and mechanical issues at the plant. It further said that Dow was in breach of its contract when it procured feedstocks for its own operations in Alberta. Nova signed the original joint venture agreement in 1997 with Dow predecessor Union Carbide, which didn’t have Alberta operations. The court sided with Dow.

“The company looks forward to having this world-scale facility operated at its full capacity, as agreed, restoring Dow’s rightful access to ethylene,” Dow’s lead trial counsel Blair Yorke-Slader says.

Nova vows to appeal within 30 days. It says the award will not hamper projects such as its ethylene cracker expansion in Ontario and a cracker project with Borealis and Total in Texas.

In the other suit between the companies, Dow alleges that Nova violated its polyethylene patents. That case went all the way to the U.S. Supreme Court, where Dow lost. Dow then took the case to Canada, where last year it won a $500 million award. A court heard Nova’s appeal earlier this month.