Steelworkers lose bid to appeal two decisions in Essar Algoma insolvency case

Union fought to have an iron-ore pellet supply deal between Essar Algoma and Cliffs Mining Co. declared illegal and unenforceable

Steelworkers Local 2724 represents salaried employees at Essar Steel Algoma

An Ontario appeal court has rejected an attempt by United Steelworkers Local 2724 to overturn two orders made by Justice Frank Newbould in the Essar Steel Algoma restructuring proceedings.

Local 2724, representing Essar Algoma's salaried employees, was trying to appeal decisions made by Judge Newbould on Dec. 22 and 29, 2016.

On Dec. 22, Newbould had ordered that a term sheet summarizing the terms and conditions of an agreement between Essar Algoma and Cliffs Mining Co. be disclosed to the union's financial advisor, subject to a non-disclosure agreement.

On Dec. 29, the judge approved the term sheet, which governed the supply by Cliffs of iron ore pellets to Algoma.

The term sheet allowed Cliffs to terminate all agreements with Algoma if Essar Global or one of its corporate entities acquired ownership of the Sault steel works.

The union, which has stated it wishes an Essar Global entity to acquire ownership of Essar Algoma's assets, wants to have conditions of the term sheet declared illegal and unenforceable.

It also wants direct access to the commercial terms of the Algoma-Cliffs deal, indicating it will need pricing information when it starts to bargain with any new owner of Essar Algoma and is asked to make concessions.

In a decision released Thursday, the appeal court also rejected a bid by Cliffs Mining Co. to introduce new evidence in relation to the Dec. 29 order.

The justices who heard the Essar Steel Algoma appeal motion were Paul S. Rouleau, Sarah E. Pepall and Lois B. Roberts.

The judges pointed out that "leave to appeal is granted sparingly in CCAA [Companies' Creditors Arrangement Act] proceedings and only where there are serious and arguable grounds that are of real and significant interest to the parties."

Those requirements were not met by the Steelworkers' motion, they said.

The three-judge panel remarked that "there was some urgency associated with the need to secure a stable supply of iron ore pellets" to keep Essar Algoma operating and there is nothing preventing future disclosure of terms of the deal.