Arbitrator upholds rejection of Ilya Kovalchuk’s contract with New Jersey

An independent arbitrator upheld the NHL’s rejection of Ilya Kovalchuk’s 17-year, $102-million contract with the New Jersey Devils on Monday, putting the three-time All-Star back into the unrestricted free-agent market.

After a two-day hearing last week, arbitrator Richard Bloch ruled that the contract was an attempt to circumvent the salary cap rules under the Collective Bargaining Agreement.

The Devils, however, remain the front-runner to sign the Russian winger.

“While we do not currently have a contract with Ilya Kovalchuk, discussions have resumed and we are hopeful that a contract will be reached …,” said Devils General Manager Lou Lamoriello in a statement.

It was not immediately clear whether the Kings would resume their pursuit of the 27-year-old goal scorer. The club had been prepared to offer Kovalchuk a 15-year deal worth $80 million but on Monday declined to comment on Bloch’s ruling.

At one point the Kings indicated they would be interested in negotiating with Kovalchuk if he were to become a free agent again. Since then, however, the club signed four-time 20-goal scorer Alexei Ponikarovsky to a one-year deal worth $3.2 million.

Kings General Manager Dean Lombardi also had said he didn’t want to sign Kovalchuk if it meant stifling his team’s chances at re-signing defenseman Drew Doughty, who becomes a restricted free agent next summer.

Under the terms of the voided contract, Kovalchuk was slated to make $99.25 million over the first 12 years of the deal before being paid $550,000 for each of the last five years, resulting in a $6-million annual cap hit against the Devils. Kovalchuk would have been 44 when the contract expired in 2027.

A restructured contract would most certainly put the Devils over the cap, forcing them to dump salary by trading or releasing players. The current CBA expires in 2012 and the NHL said it intends to close the loophole that allows for such deals.

austin.knoblauch@latimes.com