Bombardier and Metrolinx, the provincial agency in charge of transportation in and around Toronto, have repeatedly clashed over lengthy delivery delays on a contract for light rail cars.

Michael Sabia, chief executive of the Caisse de depot et placement du Quebec, acknowledged that the plane and train maker needed to make improvements in delivering the rail cars, but said Bombardier was "making progress."

Sabia said he did not think that the conflict with Metrolinx would have a long-term impact on Bombardier.

"I think it's a difficult circumstance right now," he told reporters in Montreal. "But one of the good things about black eyes is that they heal."

Bombardier shares were down more than 4 percent in afternoon trading.

Bombardier is seeking a court injunction at a hearing on March 21 in response to "unjustified threats to terminate" the contract for 182 cars, the company said in a Feb. 10 statement. Metrolinx previously filed a notice saying it wanted to terminate the contract.

"We're very hopeful that (the) situation is resolved amicably through negotiations and not through a long period of legal action," Sabia said.

Olivier Marcil, a spokesman for Bombardier, said by email that the hearing should "bring Metrolinx to resume good-faith discussions." Marcil said Bombardier is achieving its project milestones in Ontario, after on Friday making its first delivery to the Waterloo transportation agency, for a separate light rail contract.

Bombardier in 2010 won a roughly C$770 million (461.16 million pounds) contract to deliver 182 vehicles between 2013 and 2020. The light-rail vehicles are to be used in a new transit project crossing Toronto due to open in 2021, after Metrolinx pushed back its planned launch by a year.

(Reporting by Allison Lampert in Montreal; Editing by Leslie Adler)

By Allison Lampert