UPDATE 1-Navistar sues Ford again in diesel contract spat


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DETROIT, Feb 28 (Reuters) - Navistar International Corp on Thursday said it refiled a lawsuit against Ford Motor Co over a disputed diesel engine contract and was seeking "at least hundreds of million of dollars" in damages from the automaker.

Navistar originally sued Ford in June last year, claiming breach of contract. That lawsuit was dismissed by an Illinois state judge to allow time for the two companies to mediate the dispute through a third party.

Navistar said that the two sides were unable to settle the dispute in mediation, prompting the refiled lawsuit.

Ford was not immediately available for comment.

The development marked the latest escalation in a complicated legal battle between the two companies centered on the development of a next-generation for Ford's F-150 pickup trucks, the best-selling vehicles in the U.S. market.

Navistar claims in its lawsuit that Ford plans to produce a 4.4-liter diesel engine for the F-150 on its own, a move that it says violates the contract with Navistar.

Warrenville, Illinois-based Navistar says that it had spent millions of dollars to develop a next-generation diesel engine for Ford code-named "Lion" for use in the pickup trucks and other vehicles.

Navistar has been the exclusive diesel engine supplier for Ford since 1979 and claims that the No. 2 U.S. automaker had agreed to allow it to produce the next-generation engines.

Separately, the two sides have pending lawsuits against each other dating back to early 2007 over pricing and warranty claims related to the current run of diesel engines Navistar has supplied for Ford's F-Series trucks. (Reporting by Kevin Krolicki; Editing by Derek Caney and Dave Zimmerman)



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