TOKYO, March 14 Mitsubishi Heavy Industries Ltd
(MHI) jumped over 6 percent on Tuesday after an
international arbitrator ruled in its favour over a $6.7 billion
compensation claim against the company related to the shutdown
of California's San Onofre nuclear plant.
Southern California Edison (SCE), a unit of Edison
International, had raised a claim with the International
Chamber of Commerce (ICC) demanding compensation from MHI.
Both MHI and SCE said the ICC has ordered the former to pay
$125 million to the nuclear plant owners. The arbitrator also
ordered the plant owners to pay $58 million in legal fees to
"With the end of the U.S. nuclear legal dispute, which had
been feared to weigh on MHI's net profit, the company's
short-term risks are expected to be cleared," Mizuho Securities
analyst Masanori Wakae said in a report.
SCE was seeking $6.7 billion, accusing MHI of contract
violations for failing to properly design or quickly repair two
steam generators it built for the utility's now-closed San
Onofre nuclear plant.
One of the steam generators, which came with a 20-year
warranty, developed a small radioactive coolant leak after a
year, forcing SCE to take the plant off-line in early 2012.
SCE announced retirement of San Onofre in June 2013 and
filed the arbitration claim against MHI with ICC four months
MHI maintained that its contractual liability on the matter
is limited to up to $137 million.
"We had hoped the award would more accurately reflect the
true magnitude of damage caused by Mitsubishi’s defective steam
generators," said SCE President Ron Nichols in a statement.
“Unfortunately, the arbitration panel concluded that the
contract’s prescribed liability limit should be respected and no
additional award can be granted despite the harm caused,” he
In morning trade, MHI shares rose 6.4 percent to 477.5 yen,
even as the broader market's fell 0.2 percent.
(Reporting by Taiga Uranaka; Editing by Vyas Mohan)