Lummus Global Amazonas, S.A. v. Aguaytia Energy Del Peru, S.R. Ltda.

Summary

The United States District Court for the Southern District of Texas reviewed challenges to ICC arbitration awards arising from a contract for the design and construction of natural gas facilities in Peru. The court vacated and remanded the award as to certain IGV taxes and the effect of the parties’ stipulation regarding credits and payments, while confirming the remaining aspects of the arbitration award. The court denied the request to vacate the entire award based on alleged arbitrator bias and other asserted defects.

Holdings

1. The arbitration panel did not manifestly disregard New York law on concurrent delay; the panel correctly stated and applied the law, and its findings on Company Delays were supported by the record.
2. The contract terms were not too indefinite; the panel's interpretation of the 48-hour testing requirement and other protocols drew its essence from the agreement.
3. The panel did not manifestly disregard New York law on the basis of design; the panel found Schedule 2.06's specification of 'saturated' gas did not relieve LGA of responsibility for addressing CO2 corrosion, based on conflicting expert testimony.
4. The panel's exclusion of extrinsic evidence did not deprive LGA of a fundamentally fair hearing; the panel correctly found Section 5.05(b) unambiguous when read with Schedule 5.05(B).
5. LGA failed to allege facts showing evident partiality or misconduct by Jaffe; the disclosures made were sufficient, and LGA waived its objections by failing to challenge timely.
6. The panel's refusal to incorporate the stipulation did not require vacatur of the entire award; the panel did not exceed its authority or engage in misconduct, and the issue is remanded for resolution of the stipulation's effect.

Questions Presented

1. Whether the arbitration panel manifestly disregarded New York law on concurrent delay in awarding liquidated damages for LGA's failure to meet interim deadlines
2. Whether the contract terms defining completion milestones were too indefinite to be enforceable
3. Whether the panel manifestly disregarded New York law on the basis of design in awarding carbon dioxide corrosion damages
4. Whether the panel's evidentiary rulings excluding parol evidence regarding the pipe credit cap violated due process
5. Whether arbitrator Jaffe exhibited evident partiality or misconduct requiring vacatur
6. Whether the panel's refusal to incorporate the parties' stipulation required vacatur of the entire award

Disposition

partially_vacated_and_remanded