Ninth Circuit Finds Arbitration Award Is ‘Irrational’ Because It Disregards the Contract’s Plain Text Simply to Reach a Just Result

Aspic Eng’g & Constr. Co. v. ECC Centcom Constructors LLC, No. 17-16510, 2019 BL 26363 (9th Cir. Jan. 28, 2019)

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Ryan R. Deroo

Aspic Engineering and Construction Company (“Aspic”), a local Afghan subcontractor, entered into multiple subcontracts with ECC Centcom Constructors and ECC International (“ECC”), the prime contractor, to construct buildings and facilities in Afghanistan.  The subcontracts contained terms and conditions “applicable to all U.S. Government subcontracts,” and mandated that Aspic owed ECC the same obligations that ECC owed to the federal government.  The subcontracts also incorporated multiple Federal Acquisition Regulation (“FAR”) clauses, including FAR 49.2 through 49.6, which govern the recovery of expenses in the event a contractor is terminated for convenience, i.e. required documentation and procedures.

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Texas Court Holds that Arbitrator Had Jurisdiction Over Subcontractor Pass Through Claims

Centex/Vestal J.V. v. Friendship West Baptist Church
2010 Tex. App. LEXIS 4346 (Tex. App. June 10, 2010)

The trial court denied a motion to confirm an arbitration award and granted a motion to vacate finding that the arbitrator exceeded his authority when he determined the validity of and awarded the general contractor damages on its pass through subcontractor claims. On appeal, the Court of Appeals reversed the trial court, holding that because of the breadth of the arbitration clause, the arbitrator was authorized to determine the pass through subcontractor claims, and entered an order confirming the arbitrator’s award. Continue reading “Texas Court Holds that Arbitrator Had Jurisdiction Over Subcontractor Pass Through Claims”