Breach of contract and damages in the mining industry

CRA Vice President Dr. Timothy Snail advised counsel to Metso, a large global industrial machinery company, and testified on economic and statistical issues in an arbitration before the International Court of Arbitration of the International Chamber of Commerce.

The matter involved components of a mining complex commissioned by one of the world’s largest vertically integrated steel manufacturers from an industrial machinery company. The steel manufacturer claimant alleged that the mill design was defective and reduced the performance of the iron ore milling operation, resulting in breach of contract and damages. Key issues included evaluating determinants of the performance of the milling operation, sampling and statistical inference, methodologies for estimating damages, and valuation over the life of the mill.

CRA economist Dr. Timothy Snail provided expert reports and oral testimony demonstrating through statistical analysis that the mill did not underperform, the respondent’s design did not cause lost profits, and the opposing experts’ econometric damages and valuation methodologies were unreliable. The arbitral tribunal found in favor of our client in dismissing the damages claims, which totaled hundreds of millions of dollars, and awarded arbitration related fees to our client.

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