Navistar, which originally sued Ford last June for alleged breach of contract, refiled the lawsuit in Cook County Circuit Court on Tuesday after mediation ordered by Judge Dennis Burke last year failed to settle the dispute.
Navistar, which makes trucks and school buses in addition to diesel engines, claims Ford broke its contractual promise that it would be the Detroit company's primary manufacturer and supplier of V-6 and V-8 diesel engines in North America.
It maintains in the lawsuit that Ford plans to introduce a 4.4-liter diesel engine for production in North America by late 2009 or 2010 that it will produce itself for use in the F-150 pickup truck and possibly other vehicles.
Navistar has been the exclusive diesel engine supplier for Ford's heavy-duty pickup trucks since 1979.
Ford spokeswoman Kristen Kinley said the company intends to fight the lawsuit at a trial set for November.
"We maintain that the lawsuit is without merit and we are honoring commitment of the contract," she said. "We intend to prove that in court."
