MDS, a supplier of medical isotopes, is suing Atomic Energy of Canada Limited and the federal government for $1.6 billion over the cancellation of the MAPLE reactor project.
Last May, AECL scrapped the development of its two new MAPLE medical-isotope reactors at its Chalk River, Ont. laboratories after pouring hundreds of millions of dollars into the project.
The MAPLE reactors, which were described as the first reactors in the world dedicated solely to medical isotope production, were supposed to supply the entire global demand for molybdenum-99, iodine-131, iodine-125 and xenon-133.
At the time, AECL said that the world's current supply of medical isotopes would not be impacted by the decision.
However, MDS says the cancellation of the project violates a 2006 agreement the company had with AECL.
The agreement stipulated that AECL would bring the MAPLE reactors into service by October 2008 and provide MDS with a 40-year supply of isotopes.
MDS announced Wednesday that it has served AECL with notice of arbitration proceedings to compel them to fulfill their obligations in the contract or pay monetary damages.
MDS has concurrently filed a court claim for $1.6 billion in damages against AECL for negligence and breach of contract. The claim is also against the federal government for inducing breach of contract and for interference with economic relations.
"We have had to resort to taking these steps to protect the interests of patients, the nuclear medicine community, our shareholders and our customers," MDS president and CEO Stephen DeFalco said in a press release Wednesday.
"We are disappointed that AECL and the Government decided to abandon the MAPLE project without establishing a clear plan for the long-term supply of critical medical isotopes."
AECL's National Research Universal (NRU) reactor, which currently produces the medical isotopes, has an operating licence valid until October 2011. The AECL said it will work on keeping that reactor open beyond that date.
MDS says it support thats decision but it still does not "adequately address long-term supply."
The NRU is one of only four reactors in the world capable of producing isotopes for commercial use.
It supplies isotopes to MDS Nordion, which in turn processes them into medical isotopes that are then distributed to radiopharmaceutical companies.
Medical isotopes are used for a variety of tests and treatments, including for cancer, heart problems, and bone ailments.
