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Anmar suing Stelco for nearly $18M of alleged unpaid work

Grant Cameron
Anmar suing Stelco for nearly $18M of alleged unpaid work

A contractor is suing Stelco Inc. and Legacy Lands Lake Erie Inc. for nearly $18 million, claiming the steelmaking giant did not fully pay for construction services at the company’s Lake Erie Works – coke oven facility and operation in Nanticoke, Ont.

Anmar Mechanical and Electrical Contractors Ltd. alleges in a statement filed in the Ontario Superior Court of Justice in Cayuga that Stelco failed to make payments for the work, thereby causing Anmar to suffer losses.

The statement of claim is a legal filing that describes the nature of the action and lays out reasons Anmar believes it is entitled to compensation. Allegations made in the statement must still be proven in court.

The lawsuit was filed by DLA Piper Canada LLP barristers and solicitors. Lawyers for Anmar did not provide further comment. Stelco has not yet filed a response to the claim and did not respond to a request for comment.

Anmar is incorporated in the Province of Ontario and carries on business as a mechanical and electrical fabrication and installation contractor. The company supplied labour, services and materials to the project on the north shore of the lake.

Stelco is a vertically integrated, independent Canadian steelmaker that was formed in 1910 with the merger of Montreal Rolling Mills, the Hamilton Steel and Iron Company, and a handful of secondary companies located from Gananoque to Brantford. Legacy Lands is owner of the Nanticoke property.

Anmar is suing for $17.7 million, inclusive of HST, for an amount owing for services, labour and materials that have been supplied by Anmar to Stelco for the project or performed by the company for which it claims Stelco has improperly failed, refused or neglected to approve and pay, plus the costs of the proceedings.

Anmar maintains Stelco has yet to pay what is owed, despite repeated requests for the steelmaker to fulfill its agreement. The company has registered a lien against the property.

The dispute relates to services and materials supplied between Feb. 2, 2020 and Apr. 15, 2022 for construction of the coke oven facility.

Anmar claims it entered into a contract with Stelco in November 2020 to supply mechanical and electrical fabrication and installation and related labour, services and materials to the project. The contract incorporated an initial purchase order dated Feb. 20, 2020.

The contract also required Stelco to pay Anmar the full, agreed price, including all costs of completing the work.

The total price of the contract, including a purchase order and all approved changes, was $123.4 million, inclusive of HST.

Anmar states the company started the work on Feb. 20, 2020 and performed its contractual obligations “in a good and workmanlike manner.”

The statement claims Stelco has failed to make payments to Anmar for the work, thereby causing Anmar to incur damages, costs, losses and expenses.

According to the statement of claim, Anmar has invoiced Stelco for the amounts owing to it under the contract and has made repeated requests for payment, but Stelco still owes Anmar $17,667,197, inclusive of HST.

Specifically, Anmar is suing for a holdback of $4.68 million and $12.98 million it claims has been withheld for the supply of labour and materials in connection with two changes to the project.

Anmar states in its filing that the work was approved in writing by Stelco’s authorized representative and, moreover, authorized representatives also reviewed and approved the time Anmar spent on the additional work by reviewing and signing the company’s timesheets

Additionally, Anmar claims Stelco has failed to abide by its obligations under the contract to confirm substantial completion, despite repeated requests, and that the company has also refused or prevented the issuance of a certificate of substantial performance, thereby improperly preventing the holdback release.

As a result of Stelco’s breach of contract, Anmar states in the filing it has suffered and is continuing to suffer damages, costs, losses and expenses.

Meanwhile, the company states in the claim that as a result of the work it has supplied to the project, Stelco received a benefit at the expense of Anmar and that there is no juristic reason for Stelco to receive such a benefit at Anmar’s expense. It is entitled to recover the amount owing to it from Stelco.

Stelco’s Lake Erie Works has been at the forefront of North America’s steel industry since it was built in 1980. The site is the newest greenfield integrated steel making facility and serves as an industry flagship of productivity and environmental innovation.

The plant is powered by a hydroelectric grid centred around Niagara Falls at the Sir Adam Beck hydroelectric power station.

The site provides primary products for value-added finishing at Hamilton Works and integrates Stelco products into customer supply chains for just-in-time delivery. It has benefited from $600 million in investments and upgrades since 2000.

Stelco’s plant in Nanticoke and another in Hamilton employ more than 2,200 employees who work to produce more than two million tons of steel products each year.

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