Damages in Excess of $5 Million in Favor of International Project Owner and Subcontractor at ICC Arbitration

CHALLENGE

Arbitration is widely favored by large commercial clients as a means for facilitating dispute resolution quickly and inexpensively. But that process can easily become ineffective when strangers to the contract try to intervene in those proceedings. In this case, the plaintiff, a sub-subcontractor, sought recovery of unpaid amounts in state court for construction services provided to a co-defendant/subcontractor and from our clients, the general contractor and owner of a methanol facility. The defendant/subcontractor also filed claims against our clients for non-payment for work it allegedly performed.

SOLUTION

In response, our client cross claimed against the subcontractor for defective work and for failing to complete the project—resulting in completion damages. In the trial court, the sub-subcontractor and the subcontractor sought to compel group arbitration. Our client resisted and the court of appeals went in our favor. In January 2022, this matter was arbitrated between our client and its subcontractor to a three-member panel under the ICC International Court of Arbitration rules.

RESULTS

This fast-paced, multimillion-dollar case was presented through witness statements and abbreviated direct and cross examination in five days. On August 3, 2022, the ICC issued its interim award in favor of our client. The panel denied relief to the subcontractor and awarded $1.8 million to our client. This amount included all amounts paid in settlement. Attorney’s fees, as the prevailing party, costs and interests were awarded on November 11, which increased the award and final judgment to an amount in excess of $4 million. Immediately before we began the arbitration, we negotiated a settlement of the sub-subcontractor’s claim and got the lien released with a 30% discount of the amount claimed. Consequently, this award disposes of all claims against our client and the owner of the project.