MHI to pay compensation for closure of US San Onofre

17 March 2017

An International Chamber of Commerce (ICC) arbitration panel on 13 March awarded California utilities $125m in a lawsuit claiming that Mitsubishi Heavy Industries (MHI) supplied faulty steam generators contributing to the closure of the San Onofre nuclear generating station. However, this was far less than the $7.6bn sought by Southern California Edison and its partners.

The contract had capped the Mitsubishi’s liability at $137m, but Edison had sought more, saying that fraud and gross negligence on the part of MHI had led to devastating effects on the plant. The tribunal rejected claims of fraud and gross negligence against Mitsubishi, and ordered the claimants to pay MHI $58m in legal fees and costs.

MHI acknowledged that the steam generators had shown unacceptable deterioration, but said it had upheld its warranty obligations and the award should be within the liability cap. The contract also said that such disputes would be settled in arbitration. Edison will split the money with plant co-owners San Diego Gas & Electric and the city of Riverside.

The nuclear plant was closed in 2012 after a small radiation leak led to the discovery of extensive damage to hundreds of tubes inside new steam generators. The shutdown was intended to be temporary, but San Onofre was shuttered for good in 2013 in face of environmentalist concerns over safety.



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