May 2011 – Construction Law

Supreme Court Ruling Impacts Arbitration Appeals

May 31 2011

By: Jason L. Richey, Amy Ream, K&L Gates, Pittsburgh

Following the Supreme Court’s decision in Hall Street Associates, LLC v. Mattel, courts across the country have divided as to whether an arbitrator’s “manifest disregard of the law” remains a proper basis for judicial review of arbitration awards. For construction disputes taken to arbitration, this unsettled question could impact the final outcome of the dispute.

Whether “manifest disregard of the law” is an acceptable ground for judicial review of an arbitration award concerns the application of the Federal Arbitration Act (FAA). The FAA provides expedited judicial review for confirming, vacating, or modifying an arbitration award. Under the FAA’s expedited review process, a reviewing court must confirm an arbitration award unless a specific ground for judicial review exists. The primary grounds for judicial review appear in the statute itself, under sections 10 and 11 of the FAA. These sections set forth specific grounds, such as an arbitrator’s material miscalculation of an award, that trigger a court’s power to vacate or modify an award.

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Architects Beware – You Better Be Licensed In The Project Location, Even If It’s Foreign Soil

May 10 2011

By: Lawrence M. Prosen, K&L Gates, Washington, D.C.

Sturdza v. United Arab Emirates, 11 A.3d 251 (D.C. 2011)

In a case of first impression in the District of Columbia (“D.C.”), an Architect has been barred from recovering fees for architectural services in the District of Columbia where the architect lacked a license to practice in D.C. when it negotiated terms for a services contract. This bar was upheld even where (a) the architect was licensed in another jurisdiction; and (b) the project was actually on “foreign soil” in that it was for the Embassy of the United Arab Emirates (“UAE”) located in the United States.

Subcontractor Not Prejudiced When Contractor Stipulates to Liability

May 09 2011

By: Bonita Gutierrez, Anthony Badaracco, K&L Gates, New York

Zawadzki v. 903 E. 51st Street, LLC, 80 A.D.3d 606, 914 N.Y.S.2d 272 (N.Y. App. Div. 2011)

In this case, the injured plaintiff, subcontractor’s employee, sued the owner and general contractor of a construction contract in Brooklyn. The owner filed a third-party complaint against the subcontractor, which filed cross-claims against the contractor for contribution and indemnification. The contractor filed a fourth-party complaint against the subcontractor, seeking indemnification. The Appellate Division, Second Department, denied the subcontractor’s motion to dismiss or sever the fourth-party indemnification complaint, brought on the ground that the subcontractor would be prejudiced by the contractor’s stipulation of liability, to which the subcontractor did not consent. The court found that the subcontractor was not prejudiced, because even though the contractor admitted liability, the subcontractor still could assert a defense to the contractor’s indemnification claim on the ground that the contractor was actively negligent and therefore not entitled to indemnification.

K&L Gates’ Arbitration World, May 2011

May 05 2011

From the Editors

Welcome to the 15th edition of Arbitration World, a publication from K&L Gates’ Arbitration Group. This special edition focuses on issues and recent developments in the insurance coverage field. We also include our usual round-up of news items in international commercial arbitration and investment treaty arbitration.

We hope you find this edition of Arbitration World of interest, and we welcome any feedback (email ian.meredith@klgates.com or peter.morton@klgates.com).

In this Issue:

News from around the World
World Investment Treaty Arbitration Update
Business Interruption Claims and Natural Disasters
Drafting Arbitration Clauses for Insurance Policies
Repeat Arbitrator Appointments and Issue Conflicts in Bermuda Form Arbitrations
Continued Conflict over Whether McCarran-Ferguson Act “Reverse Pre-emption” Bars International Insurance Arbitrations
Political Risk Insurance – Making Recoveries and the Use of Arbitration
U.S. Courts Expand the Extent of Insurance Coverage for Construction Defects under Commercial General Liability Policies

View the entire May 2011 edition here.

Archive:May 2011