Dow Nova

The June 20, 2018 Court of Queen's Bench of Alberta decision in Dow Chemical Canada ULC v. NOVA Chemicals Corporation (2018 ABQB 482) caused headlines as a result of the more than $1.3 billion damages award. The decision should also cause some reflection to operators on their duties to facility co-owners, even where the operating agreement excludes a fiduciary duty.

Dow Chemical Canada (Dow) claimed conversion and breaches of contract against Nova Chemicals Corporation (Nova) arising out of the parties' co-ownership of an ethylene facility located in Joffre, Alberta. Romaine J. found that Nova had wrongfully taken products from Dow and failed to run the jointly-owned Joffre Ethylene-3 plant (E3) at its full capacity. As a result, the Court ruled that Nova breached its obligations, resulting in reduced productivity and reduced sales of Dow's downstream derivatives for more than 10 years. The Court's damage award covered the period 2001 to 2012 and...