A New Nexico court has dismissed an arbitration award that was unfavorable to UNC Resources of Falls Church in a five-year-old controversy over a uranium supply contract.
The latest decision, which follows a recent California court ruling in the same case, moves the controversy forward decidedly in UNC's favor. But further court actions remain before there will be a final resolution, possibly by the U.S. Supreme Court.
UNC originated the case in 1975 when it sued General Atomic Co., an affiliate of Gulf Oil Corp., seeking to void a contract requiring the delivery of 27 million pounds of uranium. United Nuclear Corp., a UNC subsidiary, alleged fraud, antitrust violations and economic "coercion" in its lawsuit.
The New Mexico District Court ruled in UNC's favor, a decision later upheld by the New Mexico Supreme Court and since appealed to the U.S. Supreme Court by General Atomic.
General Atomic also sought arbitration of one contract, involving 24 million pounds of uranium, but the New Mexico courts said the right to arbitration had been waived. General Atomic continued to press for arbitration, and a two-man panel last September awarded that company $300 million in damages and ordered UNC to deliver 15 million pounds of uranium at prices now below the mining costs.
The Falls Church company did not take part in these arbitration proceedings, however. When General Atomic sought to have a California state court affirm the arbitration order, it was successful at first. But the California Court of Appeals ruled in December that the petition must be dismissed and said New Mexico's earlier rulings must be honored.
General Atomic has indicated it will seek review of that case by California's Supreme Court, and the Gulf affiliate also is seeking federal court review of the U.S. District Court decision turning aside the case because of lack of jurisdiction.
UNC President Keith Cunningham said yesterday that the latest New Mexico and California decisions "go far toward disposing of the arbitration issue . . . ruled on repeatedly by the New Mexico courts years ago, and each of these decisions strengthens those original rulings."
Specifically, in a decision last Friday, the New Mexico District Court said arbitrators "had no jurisdiction to issue an award in the purported arbitration" and that the arbitrators "exceeded their powers."