Nunatsiaq Online
NEWS: Nunavut June 21, 2017 - 10:00 am

Construction company, Nunavut iron mine settle fight out of court

Arctic Construction Ltd. drops suit against Baffinland; CEO says he's "content" with outcome

BETH BROWN
Arctic Construction Ltd., of B.C., and Baffinland Iron Mines have settled a multi-million-dollar financial dispute out of court. Arctic Construction's CEO says he's
Arctic Construction Ltd., of B.C., and Baffinland Iron Mines have settled a multi-million-dollar financial dispute out of court. Arctic Construction's CEO says he's "content" with the settlement and would consider working again for Baffinland in future. (FILE PHOTO)

A legal dispute between a B.C. subcontractor and Baffinland Iron Mines Corp. over payment for work done at the Mary River iron mine in North Baffin has been settled out of court.

Arctic Construction Ltd. gave notice of withdrawal, April 20, for a $6.2 million lawsuit and lien filed in December 2015 against the multinational mining company.

The subcontractor had claimed incomplete payments for construction work done at the Mary River mine, the Milne Inlet shipping port, and a connecting service road.
Arctic Construction’s lawyer, David McKenzie, confirmed last week that a settlement agreement was reached between the two parties. But neither side has disclosed the details of the agreement. 

“What’s important is it was settled and our last payment from them is coming at the end of the month,” said Ted Pickell, Arctic Construction Ltd.’s chief executive officer. “We’re content—and I’m not easily content.”

The initial work contract, awarded in 2013, capped project costs at about $17.5 million plus a mark-up of 10 per cent for materials sent by the construction company to the mine site, according to court documents obtained by Nunatsiaq News.
But the scope of work grew and by the time Baffinland had delivered its statement of defence in May 2016, Arctic Construction had been paid around $27 million.

In its defence, Baffinland denied owing money saying that Arctic Construction exceeded contract costs for bridges and fold-away buildings by as much as $7.7 million, following alleged unilateral decision-making on behalf of the subcontractor.

The mining company then counter-sued for those extra costs.

Pickell said that Baffinland had offered his company a financial settlement prior to the lawsuit, but that this amount wasn’t enough.

“We’re a 65-year-old company. We’re established and financially strong,” Pickell said, and for that reason, Arctic Construction was in a position to hold its ground against Baffinland. He said newer companies with more debt might not have that luxury.

Despite the financial dispute, Pickell did not rule out working again for Baffinland in future.

Nunatsiaq News contacted Baffinland Iron Mines, but the company declined to comment.

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