US healthcare multinational Abbott Laboratories will next week contest a claim for up to €15 million in compensation from a Galway-based construction company.
Abbott is in dispute with TBD Building Contractors Ltd over the construction of a large plant at Ballytivnan, Co Sligo. The dispute is scheduled to go before an arbitration hearing in Dublin on Tuesday.
Neither party was prepared to comment yesterday, but it is understood that a delay in the construction of the plant is the main issue at stake.
TBD, which is one of the largest building firms in the west of Ireland with a turnover of €56 million, is expected to claim that a large number of construction workers had to be let go because of delays by Abbott.
However, the US company is expected to strongly contest this claim.
There were five contractors working on the project and TBD was the largest. According to its most recent accounts - for the year to June 30th, 2003 - the dispute with Abbott appeared to be a significant issue for the company.
The accounts said: "The financial statements include certain current assets, the recovery of which is dependent upon a successful outcome of a current binding arbitration process relating to a specific construction contract."
According to the accounts, TBD hired professional advisors to assist it in the arbitration process. Barrister Bill Shipsey SC is believed to be representing the company at the hearing before Michael Collins SC.
The accounts indicate the company is confident of its position.
"The directors believe on the basis of progress to date and the professional advice received that the current assets are fairly stated in the financial statements."
However, the accounts conceded that adjustments may have to be made, upward or downward, following the outcome of the action.
Arbitration hearings are common in the building industry and results can vary.
Recently a significant case ruled in favour of the company Uniform Construction against Limerick City Council.
It found that the council had wrongly removed Uniform from the city's main drainage project. Uniform was awarded €25 million in compensation, although this may increase. Uniform said it had suffered serious damage to its reputation after it was removed from the project.
