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ARTICLE · 23 SEPTEMBER 2021

MDS Inc. V. Factory Mutual Insurance Company: Implications For COVID-19 Business Interruption Litigation

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A recent Ontario Court of Appeal decision provides guidance for businesses and insurers involved in litigation about the inability to use machinery due to COVID-19 lockdowns.

CanadaLitigation, Mediation & Arbitration
Raj Datt
Raj Datt
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A recent Ontario Court of Appeal decision provides guidance for businesses and insurers involved in litigation about the inability to use machinery due to COVID-19 lockdowns.

MDS Inc. v. Factory Mutual Insurance Company, 2021 ONCA 594, is an appeal about whether the insurer appellant, Factory Mutual Insurance Company ("FM Global"), is required to provide insurance coverage for losses arising from an unplanned shutdown of the Atomic Energy of Canada Limited ("AECL") Nuclear Research Universal ("NRU") reactor located in Chalk River, Ontario on May 14, 2009. The respondents, "MDS", operate a global health science company.

On February 21, 2006, MDS agreed to buy radioisotopes from AECL to be produced at the NRU reactor. The radioisotopes were to be sold worldwide for cardiac imaging, cancer treatments, and sterilization of medical products. On May 14, 2009, heavy water containing radioactive tritium was discovered leaking through the calandria wall of the NRU

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