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An Ontario court has thrown out businessman Karlheinz Schreiber's lawsuit against Brian Mulroney, saying it has no jurisdiction over the dispute.

In a decision released yesterday, Mr. Justice Maurice Cullity of the Ontario Superior Court rejected Mr. Schreiber's argument the matter should be heard in Ontario.

It is the latest twist in a long-running skirmish between Mr. Mulroney and Mr. Schreiber that has played out in courtrooms, committee hearings and in the news media.

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Mr. Schreiber filed the lawsuit against Mr. Mulroney in March to recoup $300,000, plus interest, that he alleges he gave the former Progressive Conservative prime minister over three meetings in hotel rooms in Montreal and New York in 1993 and 1994.

In his statement of claim, Mr. Schreiber said the cash was to enlist Mr. Mulroney's help in establishing an arms factory in Quebec with a head office in Ottawa, and a pasta business in Ontario. The lawsuit claimed Mr. Mulroney did not follow through on his business commitments. None of the allegations has been proven in court.

"There are no significant connections between Mr. Mulroney and Ontario," Justice Cullity wrote in his 20-page decision.

Judge Cullity said given the "low threshold that Mr. Schreiber has failed to surmount, I believe that Mr. Mulroney is also entitled to have the action dismissed" as the former prime minister had asked. "Accordingly, the action is dismissed."

Judge Cullity also indicated in his submission that he would accept motions for costs. Mr. Schreiber had already been ordered to pay Mr. Mulroney about $90,000 in costs for various failed motions.

Mr. Schreiber faces extradition to Germany, where he is wanted on charges of bribery, fraud and tax evasion.

Ken Prehogan, a lawyer for Mr. Mulroney, refused comment on the court decision yesterday, noting Mr. Schreiber has a right of appeal.

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"To that limited extent, the matter is still before the courts."

Mr. Schreiber could also choose to pursue the matter in the Quebec legal arena.

Reached at his Ottawa home, Mr. Schreiber declined comment, deferring to his lawyers. Richard Anka, counsel for Mr. Schreiber, did not return phone messages yesterday.

Prime Minister Stephen Harper said yesterday it's up to his appointed adviser, David Johnston, to determine if a public inquiry will be necessary to resolve the Mulroney-Schreiber matter.

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