UPDATE 2-ADM sues Canadian Pacific over 2013-14 rail service disruptions

Wed Mar 23, 2016 5:49pm EDT
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(Adds response from Canadian Pacific)

By Nick Carey and Tom Polansek

CHICAGO, March 23 (Reuters) - Archer Daniels Midland Co has filed a lawsuit against Canadian Pacific over service disruptions in 2013 and 2014 at crop-processing plants in North Dakota and Minnesota, alleging they stemmed partly from cost-cutting and the Canadian railroad's pursuit of merger partners.

Chicago-based ADM, one of the world's largest grain traders and processors, filed suit against CP in the U.S. District Court for the Central District of Illinois last Friday, seeking damages "resulting from one of the worst and most persistent railroad service failures experienced by ADM in many years."

But that same day, the railroad filed a claim against ADM in the U.S. District Court for the District of Minnesota seeking payment of overdue charges.

Railroads have long served as the lone, dependable way to move grain across the northern U.S. Plains, where there are no commercially-navigable rivers.

In early 2014, after months of worsening delays crippled the U.S. farm transportation system, farmers in the Upper Midwest held the largest grain stocks in years.

A CP spokesman said ADM's claim stems from that harsh winter, adding it would "defend itself vigorously against ADM's frivolous allegations."

ADM refers in its lawsuit to damages of "several million dollars," but it is potentially embarrassing as it highlights key benefits CP has touted in its bid for Norfolk Southern Corp .   Continued...