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Mitsubishi Case May Be Headed For Arbitration

Saturday, July, 27, 2013

On July 18th, Mitsibushi Heavy Industries Ltd was notified that Southern California Edison Co. will be seeking damages as a result of faulty steam generators used at SCE’s San Onofre Nuclear Generating Station.  SCE alleges that the defective generators cause the plant to be closed down. 


The official dispute notice stated that Mitsubishi breached its contract for the design and manufacturing of replacement steam generators.  SCE argues that the utility company received malfunctioning generators that led to radiation leaks, forcing a plant-wide shutdown in the beginning of 2012.  SCE determined that it was not worth attempt to repair the problems at the plant, leading to its final shutdown in June.  The utility company alleges that the computer system in the generators did not predict their deterioration, so the generators were used well beyond when they should have been repaired or replaced. 


After being notified of the original problems with the generators, Mitsubishi declined an opportunity to complete an audit of their documentation of work on the generators, despite the fact that this was required by their contract.  SCE argues that their company provided thousands of documents related to their costs and time spent investigating the generator issues and their attempts to repair the issues, although Mitsubishi never replied at the time regarding a statement of their responsibility for any those issues.  SCE is hopeful that the official dispute resolution or binding arbitration may lead to a final conclusion of the problem, allowing them to recoup some of the losses associated with repair attempts and the final plant closing. 


The dispute will be referred to a 90-day dispute resolution process, and if both sides can’t come to an agreement, SCE plans to initiate binding arbitration with Mitsubishi.  A Mitsubishi spokeswoman state recently that the company is still reviewing the initial notice and currently had no comments.