HOUSTON, TX — The Fifth Circuit Court of Appeals affirmed the U.S. District Court’s confirmation of an arbitration award in favor of Houston-based construction lawyers Andrews Myers’ client, Petrofac, Incorporated in its construction claims case against DynMcDermott Petroleum Operations Company (DM).
The district court previously confirmed a 2010 American Arbitration Association (AAA) panel’s award to Petrofac of nearly $7 million in damages and attorneys’ fees arising from its EPC contract for the design and construction of a transportable degasification plant to remove accumulated gas from crude oil stored at two Strategic Petroleum Reserves sites. On appeal, DM unsuccessfully argued the panel exceeded its powers by issuing an award on a claim it alleged was not covered by the parties’ agreement for arbitration under the AAA rules.
The Fifth Circuit chose to follow most of the other circuits in ruling arbitrators, not the courts, determine whether claims and disputes fall within the parties’ agreement to arbitrate when those agreements incorporate the AAA rules.
“We are always gratified when an appellate court unanimously affirms an award and judgment in favor of one of our clients,” said Robert “Bob” Plessala, senior counsel with Andrews Myers P.C. “This decision was particularly satisfying because the Fifth Circuit panel wholly agreed with each of our client’s arguments. More importantly, this ruling hopefully puts to an end what has been a lengthy legal battle for Petrofac and all those involved in the prosecution of this case.”
Houston construction shareholder William K. “Bill” Andrews and firm co-counsel David J. Bush of Kent, Anderson & Bush, P.C. were the lead lawyers for Petrofac through the conclusion of the arbitration proceeding. Mr. Plessala was Petrofac’s lead lawyer for the district court confirmation and the Fifth Circuit appeal.