Western Canadian Coal Corp.

Western Canadian Coal Corp.

October 13, 2005 09:27 ET

Western Canadian Coal Corp.: Favourable Arbitration Award is Challenged by CN Rail

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 13, 2005) - Western Canadian Coal Corp. (TSX:WTN)(AIM:WTN) ("WCCC") announced today that, along with the Attorney General of Canada, the Canadian Transportation Agency and an arbitrator, it has been named as a party to an application to the Federal Court of Canada ("Federal Court") by Canadian National Railway Company ("CN"). The background of the application is as follows: following the expiration of the contract between WCCC and CN for the provision of rail freight services, and the inability of the parties to reach a new agreement, WCCC submitted the matter of its rates and conditions to final offer arbitration ("FOA") under the Canada Transportation Act ("CTA") and on September 6, 2005, an arbitrator appointed by the Canadian Transportation Agency issued a decision in favour of WCCC. FOA is a critical mechanism under the CTA that allows shippers to dispute rates charged by a carrier such as CN. The CTA provides that the decision of the arbitrator on a FOA is final and binding on the parties.

On October 5, 2005, CN filed an application for judicial review in the Montreal registry of the Federal Court seeking declarations that (a) all sections of the CTA relating to FOA are inoperative, being in contravention of the Canadian Bill of Rights and (b) the September 6, 2005 decision of the arbitrator be set aside.

WCCC views CN's application as being without merit and has retained counsel to respond to CN's application. While it is unclear at this point what the outcome will be, should CN's application be successful, WCCC assumes that the rail freight rates imposed by CN will be higher than those currently in place under the FOA award. Consequently, overall transportation costs could increase by an estimated 6%.

WCCC is also of the opinion that if CN's position is found to be correct, the effects would apply to WCCC's immediate rail and service conditions and to shippers in circumstances similar to those of WCCC, thus altering the dynamics of the market for the provision of transportation services across Canada. Accordingly, WCCC anticipates that the Federal Government as well as a number of shippers and shipping associations will take an active role and interest in this case.

Forward-Looking Information

This release may contain forward-looking statements that may involve risks and uncertainties. Such statements relate to WCCC's expectations, intentions, plans and beliefs. As a result, actual future events or results could differ materially from those suggested by the forward-looking statements. Readers are referred to the documents filed by WCCC on SEDAR.


Gary K. Livingstone, President and Chief Executive Officer

Contact Information

  • Western Canadian Coal Corp.
    Gary K. Livingstone
    President & CEO
    (604) 608-2692
    Western Canadian Coal Corp.
    Fausto Taddei
    CFO & Corporate Secretary
    (604) 608-2692
    (604) 629-0075 (FAX)