HALIFAX, Nova Scotia (AP) – Scotia Prince Cruise Lines has filed a $20-million lawsuit against the city of Portland, Maine, claiming it failed to eliminate mold problems in its passenger terminal.

The operator of the ferry service between Portland and Yarmouth, Nova Scotia, announced this week it was cancelling its service for the season because it didn’t want to jeopardize the health of its staff or customers because of the mold.

The company said it had no choice after an expert toxicologist found a mold problem identified in the building last August hadn’t been corrected.

Each year the company’s ferry, the Scotia Prince, carries about 140,000 passengers between the two ports. A 2002 study showed passengers injected $110 million into the Nova Scotia economy and had a $60-million economic impact on Portland.

The multimillion-dollar suit has been filed with the American Arbitration Association, the dispute resolution body designated in the 35-year-old contract between the city and cruise line.

The suit says the city’s failure to provide safe docking facilities represents a fundamental breech of the contract.

Portland city manager Joe Gray said Friday that officials have responded by severing the relationship with the Scotia Prince. The city will launch a countersuit claiming $400,000 in lost rent and a portion of the $1.2 million the city has spent repairing the terminal.

He said the building’s frame was treated, new mold-proof drywall was installed, the entire first floor was gutted, and a warehouse was torn down and replaced.

The city has seen reports from Scotia Prince’s toxicologist, but Gray said it has done its own testing and the preliminary results show the renovated building is safe. He expects the final results by early next week.

“What’s this really about? We’re perplexed,” he said. “They admit last season they didn’t have many passengers. … Certainly the decline in business is something that is being alluded to in the community.”

Scotia Prince employs 250 full- and part-time employees at the height of the summer season.

Problems with the International Marine Terminal came to light last August when mold was discovered. The company pulled its employees and began processing passengers in a tent outside.

Fourteen employees who suffered health problems have given notice that they intend to sue.

Those workers allegedly suffered from problems including disabling fatigue, chronic headaches and memory loss.

Copy the Story Link