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Ontario judge grants Bombardier request for injunction against Metrolinx

Staff Writer |
Bombardier Transportation scored a procedural victory against an Ontario transit agency when a judge ruled that Metrolinx can't cancel a $770-million contract without first going through a dispute resolution process.

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Glenn Hainey, of the Ontario Superior Court of Justice, rejected Metrolinx's argument that an arbitration process spelled out in the contract doesn't apply to its right to terminate the agreement for material default.

He ordered Bombardier to take "all reasonable steps" to expedite the dispute process.

Metrolinx alleges that Bombardier (TSX:BBD.B) has repeatedly failed to deliver a prototype vehicle on time for the scheduled 2021 opening of the $5.3-billion Eglinton Crosstown line.

The agency has also said Bombardier's request for a court injunction to block the contract termination is a tactic to force months of litigation that would make it impossible for another supplier to provide the vehicles on time.

Bombardier has rejected Metrolinx's allegations, saying it will deliver the vehicles on time by November 2018, well before the Eglinton Crosstown tracks are even built.

Hainey said Metrolinx provided no evidence that an alternative supplier could realistically deliver the rail cars by the required date.

He agreed with Bombardier that there is a meaningful risk that the company will suffer "irreparable harm" if the contract for 182 rail cars is terminated, regardless of Bombardier's ability to secure financial damages.

Bombardier issued a statement regarding the favourable ruling: "We are very pleased with the Court’s ruling. The decision confirms our belief that Metrolinx acted inappropriately in seeking to avoid the dispute resolution provisions of the contract.

"The hundreds of Bombardier Transportation employees in Ontario are committed to the success of the light rail expansion projects, and we are on track to deliver high quality, state-of-the-art vehicles on time to support the Eglinton Crosstown expansion.

"It is unfortunate that Bombardier had to resort to the Courts to resolve this matter, and it is our hope that today’s ruling will now allow the parties to focus on delivering the light rail expansion projects on time and on budget."

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