In 2012, nuclear plant Southern California Edison located in San Onofre was shut down following a radioactive leak, which SCE attributes to allegedly faulty steam generators supplied by Mitsubishi Heavy Industries.  SCE generated power for approximately 1.4 million homes in California, and has since announced that the nuclear plant will not reopen.

Southern California Edison has taken legal action against Mitsubishi, claiming the company violated its contract; SCE also alleges gross negligence in the design and repair of the steam generators.  SCE states in its claim that the steam generators have a 20-year warranty, and that after only one year of use one of the generators leaked a small amount of what was described as ‘radioactive coolant.’  Mitsubishi calls the claims against their company ‘legally unsound’ and ‘inappropriate.’

In a notice of dispute filed against Mitsubishi, SCE claims that equipment was not sufficiently tested, and that the leak was due to Mitsubishi not designing a system for prevention of premature wear.  Enormous harm to California power customers was also alleged by an SCE spokesperson.  According to news articles, if Mitsubishi fails to respond to SCEs claim within 90 days, the companies may settle the contract dispute through arbitration.

Spokeswoman for SCE Maureen Brown said that Mitsubishi, “did not deliver what they promised,” and that the claim is about gross negligence.  The Japanese heavy equipment manufacturer said that it did not believe its earnings would be impacted by the dispute.

As Los Angeles business attorneys, we are highly capable in contract disputes, as these are some of the most common types of disputes among businesses both small and large.  In all business matters related to contracts, agreements, mergers and acquisitions, intellectual property and more, count on our dedicated team of professionals at Spotora & Associates.