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Federal government files lawsuit against Churchill railway owner

Federal government files lawsuit against Churchill railway owner
From CBC - November 14, 2017

The federal government has filed a lawsuit against Omnitrax,the owner of the washed-out rail lineto Churchill.

On Tuesday, the federal government filed a statement of claim against the company for breach of contract, Transport Canada said in a news release.

"This legal action follows the notice of default Transport Canada sent Omnitrax Inc. on October 13, 2017, which demanded that it complete all railway repairs and resume rail service within 30 days," the Transport Canada release said.

Meanwhile, the American owner of the rail line says itintends to file a claim under NAFTA asking for independent arbitration, saying the federal government has "sabotaged" efforts to repair and transfer ownership of the line.

Omnitrax on Tuesday filed a notice of intent to submit a claim under Chapter 11 of the North American Free Trade Agreement.

The company, which owns the Hudson Bay Railway and the Port of Churchill, has been under fire to repair the now-inoperable line after flooding washed portions of it away in May. Northern communities that ca not be reached by road and have relied on the railway to supply basic necessities face skyrocketing prices for staples such as groceries and fuel.

Chapter 11 under NAFTA allows businesses to sue a government without first going through the country's court systems. It is intended to protect foreign investors from discrimination.

Omnitrax says it can break contract with Ottawa after government intervention, flooding

"We are disappointed that it has come to this, after having attempted countless times over the past several months to find a viable long-term solution to the challenges faced by the HBR [Hudson Bay Railway] and the Port of Churchill," Omnitrax president Merv Tweed said in an emailed statement.

"We believe we have exhausted all available options to facilitate the repair and transfer of the HBR, port and related assets. At every turn, our efforts have been stalled, obfuscated or ultimately sabotaged by the federal government. We view this NAFTA claim as a last resort."

Two decades of turmoil

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