Expertise Valued
Record-Breaking CAD3.56B Award Caps Decades of Litigation for Dow Chemical
Expertise Valued
Record-Breaking CAD3.56B Award Caps Decades of Litigation for Dow Chemical
Key Contacts
When a contract breach lasts more than a decade, how do you calculate billions in damages?
Corporate giants battle in Canadian court for 20 years
In 1997, Union Carbide and NOVA Chemicals entered a joint venture to build a facility in Joffre, Alberta, Canada, with an 80-year contract to produce ethylene, a key ingredient for producing plastics. Dow Chemical, a competitor of NOVA, acquired Union Carbide’s ownership of the joint venture in 2001, expecting NOVA to honor the existing contract. However, in 2006, Dow sued, alleging that NOVA was diverting some of Dow’s ethylene for itself and was not running the plant at full capacity as they were required to do.
FTI Consulting was engaged by Dow in 2011, and the case went to trial in 2015. In June 2018, the Court awarded CAD1.43 billion in damages covering the period from 2001 through 2012 and ordered an additional calculation for damages through June 2018. NOVA paid Dow in 2019.
In September 2020, however, the Alberta Court of Appeal directed that Dow’s damages be recalculated, resulting in several years of court proceedings to determine the full amount of the damages award to Dow.
Our Impact
Our Role
Industry expertise to please the court
In its initial damages opinion, FTI Consulting’s experts built a complex and dynamic damages model that was used in testimony to calculate damages related to both how the produced ethylene was improperly allocated between NOVA and Dow and the economic impact of reduced output due to suboptimal operation of the facility.
Following the appeal, FTI Consulting re-evaluated damages based on the appellate court’s opinion and the portions of the trial court’s findings that remained undisturbed.
FTI Consulting’s experts earned credibility with the Court by demonstrating not only vast industry knowledge, but also a commitment to our duty and responsibility to the Court.
The Court’s costs decision called out FTI Consulting’s testifying expert as having “qualifications [that] were not just related to his calculations. He was also an industry expert. NOVA had to call several experts to respond to his reports.”
“FTI’s work proved invaluable throughout the course of this decades-long dispute. The FTI team expertly unpacked and synthesized complex information for the Court regarding the ethylene business in Alberta as well as Dow’s own business practices within the ethylene industry.”
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