The
Telegram (St. John's)
News, Saturday, May 14, 2005, p. A1
Court/business
Data Company Wins Suit
Against DFO
Callahan,
Brian
It was illegal for federal officials to terminate its longtime
contract with St. John's-based Nautical Data International (NDI)
Inc., a Newfoundland Supreme Court judge has ruled.
"What they did was totally illegal and improper," Tom
Kendell, lawyer for NDI, told The Telegram Friday.
"Only the bureaucrats with the federal government would do
what they did with our money. Total arrogance."
The federal Department of Fisheries and Oceans (DFO) cancelled the
contract in a tersely worded letter faxed to NDI on Jan. 4,
citing "over 100 complaints" about the company's
service.
Complaints listed
The contract was supposed to run until 2013.
"These complaints have come from a variety of sources,
including recreational boaters, the navigational chart industry,
and other levels of government," read a statement on the
Canadian Hydrographic Service (CHS) website, a division of DFO.
CHS said the gripes ranged from frustration with pricing practices
to boaters being unable to obtain the chart products they needed
on a timely basis.
DFO itself said it was having "serious difficulties with NDI,
including non-payment of royalties for DFO-owned products."
"Despite repeated efforts to remedy these problems, there has
been little improvement in the situation. As a result, DFO is
terminating this agreement with NDI."
That was to happen as of Feb. 4, but the contract remained in
effect pending an outcome of the court action launched by NDI.
It resumes in full force with the court's ruling in favour of NDI,
Kendell said.
"Some bureaucrats in Ottawa made a decision that they were
going to tear this contract up and move the jobs to
Ottawa," he said.
"They were thinking they could drag this out in the courts and
this small company would not be able to afford that. That was
their strategy."
Fortunately for NDI, a mainland shareholder "with deep
pockets" offered to fund the company in the interim. And
with the money Kendell figures NDI is owed in damages and court
costs, it shouldn't be hard to pay him back.
"(Ottawa) will be writing a big cheque at some stage of this.
And I would say it'll be sooner rather than later," he
said, noting NDI has sued for $109 million.
"That may be a stretch to expect (from the courts), but (the
overall damages) will certainly amount to several million
dollars before this is finished."
Navigational charts
Incorporated in 1993, NDI provides electronic navigational charts
and related hardware, software and data products and services
for marine transportation, recreation, and science and
engineering.
Under the agreement, NDI has exclusive rights to distribute CHS
digital charts to commercial fishing and workboat operators,
government fleets, recreational boaters and sport fishermen, as
well as scientists, engineers and resource managers.
The company was able to secure those rights because it was the only
company using such technology when the deal was signed in the
early 1990s.
In a January interview, NDI executive vice-president Greg Mercer
suggested Ottawa wanted to scrap the contract because it feared
it was losing out on bigger royalties from more companies as the
technology grew in popularity.
In a nutshell, DFO wanted to take over exclusive rights to
distribute the charts itself.
"It really is quite something, what DFO attempted to do,"
Kendell said.
"It's just incredible that they just decided they wanted to
terminate the contract like that. They didn't care what was in
it, or what their legal rights were. Here's 15 Newfoundlanders
gainfully employed ... doing world-class work.
"It's just incredible."
Kendell agreed it's likely DFO will appeal the decision.
"It's an ebb and flow. And right now, the momentum is towards
finally bringing these guys to task and making them compensate
the company for what they did.
"The important thing is the contract stays in effect and the
company carries on and the jobs stay here."
Meanwhile, a separate suit NDI launched against two Italian
companies carries on.
NDI is suing C-Map Inc. and Navionics Inc. for $68 million,
accusing them of pirating its data for years.
Kendell said an application will be filed by the end of this month
"to move it along."
"All the while those Italian companies were operating, they
were skimming off hundreds of thousands, if not millions of
dollars in royalties, which should have gone to NDI," he
alleged.
bcallahan@thetelegram.com
bcallahan@thetelegram.com
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