We already paid your legal fees, Astaldi says to Nalcor in new court documents

Astaldi Canada is asking a judge to throw out an order for $437,000 in legal fees.

The Muskrat Falls Corporation — a subsidiary of Nalcor — says Astaldi missed the deadline to pay those legal fees after losing one of the court battles between both sides.

Nalcor asked a judge to force the company to pay up, but Astaldi insists the money was paid and Nalcor is wrong.

"Astaldi insists that there can be no proceedings upon the costs award in that, amongst other things, the costs award has been paid," reads a document filed at Supreme Court in St. John's last week.

The 22-page filing paints a picture of a confused contractor, a broken relationship and a dispute with hundreds of millions of dollars hanging in the balance.

Letters of credit used to pay Pennecon

The relationship began to sour as the project dragged on, well over budget and behind schedule. Astaldi, the principal contractor, says it stopped getting paid by Nalcor in the summer of 2017 and began taking on heavy losses.

Meanwhile, Nalcor wanted to recoup some of its own losses and hire a new firm to finish the job.

The contract between the two had a sort-of contingency fund in place, through something called performance letters of credit. If Astaldi did not perform its duties, Nalcor could draw money from two letters of credit issued by the National Bank of Canada.

Last November, Astaldi sought to protect this fund from Nalcor by going to the Supreme Court of Newfoundland and Labrador to seek an injunction. It backfired.

A judge said the Crown corporation could draw the money, and Nalcor used $184 million to hire Pennecon to finish the project.

Nalcor claimed it lost $437,000 in legal fees while fighting to use the letters of credit. In June, a judge ordered Astaldi to pay up.

Nalcor says the money was never paid, but Astaldi says it told them to take the legal fees from the performance letters of credit.

In the recent court filing, the company says it doesn't understand why the money wasn't accepted.

Aside from the Supreme Court battle, the two sides are also going through an arbitration process in Toronto.

If Nalcor wants to get the money any other way, Astaldi says the arbitrator will have to approve it. Therefore, it's asking the court to throw out Nalcor's order and "declare it contempt of the arbitration."

Both sides will be in court Sept. 19 to set a date for a hearing on the issue.

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