Hydro Wins Second Round Against Denison

On November 24, 1999, an arbitration panel chaired by the former Chief Justice of Ontario, the Honourable Charles L. Dubin, Q.C., ruled in favour of Ontario Power Generation Inc. (a successor company to Ontario Hydro), rejecting a claim by Denison Mines Limited that Ontario Hydro owed it over $18 million (including interest) for uranium deliveries made to Ontario Hydro in the waning months of a long-term uranium supply contract. In 1992, Ontario Hydro had withheld payment from Denison for the final uranium deliveries and instead remitted the funds to the Toronto-Dominion Bank in repayment of a loan to Denison that Ontario Hydro had guaranteed. The majority of the panel, consisting of Mr. Dubin and Robert M. Loudon, Q.C., held that, in all the circumstances, Ontario Hydro had the right to set off the amounts it paid to the bank against the charges for uranium. The third panel member, Richard W. Pound, Q.C., dissented. Denison is attempting to appeal the ruling to the courts. This is the second round of the dispute between Ontario Hydro and Denison arising outof the termination of the uran-ium supply contract. In 1994, Ontario Hydro had successfully resisted another claim by Denison for approximately $350 million. In the current proceedings, Ontario Hydro/Ontario Power Generation was represented by Joseph M. Steiner and Joseph A. Starkman of Osler, Hoskin & Harcourt LLP. Earl A. Cherniak, Q.C., and Susan B. Wortzman of Lerner & Associates acted for Denison, and Harry C.G. Underwood and Darryl A. Cruz of McCarthy Tétrault acted for The Toronto-Dominion Bank