Porter Hedges successfully represented KBR in a recent international arbitration proceeding (under the ICDR) and received a final award in favor of KBR zeroing out a Kuwaiti subcontractor. This marks the fifth international arbitration hearing in the last three years in which Porter Hedges has zeroed out a claimant's request for disputed funds.
The dispute involved a claim for idle labor at a United States military base in Iraq, and the subcontractor sought approximately $3 Million from KBR (the general contractor under a prime contract with the Army). After the subcontract was signed, the Army changed its security/badging requirements for all subcontractor personnel working at US bases in Iraq which severely delayed the project. The subcontractor blamed KBR for the delays and its alleged increased labor costs.
KBR faced some equitable hurdles because it was undisputed that the Army changed the badging rules and it did impact the subcontractor's work. However, KBR successfully challenged the contractual basis and evidentiary support for the subcontractor's claim.
At the beginning of the hearing, the subcontractor changed its primary arguments, but KBR successfully defeated the new arguments. The Tribunal accepted all of KBR's major arguments and concluded that the claim "lacks both contractual basis in [the Subcontract] and evidentiary support."
The KBR trial team included Nicholas Simms, Kerry McMahon and Scott Kelly. The Washington office of an international law firm represented the Kuwaiti subcontractor.
Porter Hedges' successful representation of KBR follows another recent success in an ICC arbitration. Porter Hedges represented an ultra-deep water drilling rig management company that completely defeated a $19 million liquidated damages claim. Before securing the favorable final award, Porter Hedges negated the claimants’ multiple attempts to obtain interim relief in the form of a $17 million security bond. Porter Hedges also won a recovery of over $1 million in costs and fees for its client. The trial team included Jeff Elkin and Scott Kelly.