Active Energy has announced that Player Design (PDI), its contractor on the CoalSwitch plant at Ashland in Maine, has started legal action against the company.
In a statement, Active Energy said this legal action by PDI is "completely without just cause ...and forms an attempt by PDI to obfuscate its contractual responsibilities”.
The company will vigorously defend any baseless legal claims by PDI or Tyler Player, its owner, it added.
PDI told Active Energy last month it would not supply Coalswitch fuel pellets to any prospective customers despite an obligation under a take or pay agreement.
Active Energy now wants PDI to return US$1.1 million it paid toward the development of the Ashland facility and an additional US$300,000 of prepaid monies for future services.
Production equipment and components situated at the Ashland Facility also have to be returned or else compensation paid, it added.
PDI has also presented claims for intellectual property related to the CoalSwitch production process, specifically for black pellet production using steam treatment technologies.
Active Energy said it will vigorously act to defend its CoalSwitch intellectual property and protect its shareholders' interests.
Unless an agreement is reached on these points, Active Energy said it will start legal proceedings against PDI.