Partners David Peden and John Hawkins led the Porter Hedges team which successfully represented Bilfinger Westcon, Inc. (Westcon) in defeating Austrian-based voestalpine before an ICC arbitration panel in Houston. voestalpine’s claims of $47 million were wiped out by the panel. In addition, Westcon was awarded $28 million for wrongful termination, including attorney’s fees.
The dispute related to the construction of a Hot Briquette Iron facility in Texas. Westcon is a diversified industrial construction company which provides construction services to industrial processing facilities throughout the United States.
Westcon was one of several prime contractors selected to construct voestalpine’s Hot Briquette Iron facility on the north shore of Corpus Christi Bay in Texas. Only weeks after it was signed, the Westcon lump sum contract was changed dramatically with the delivery of over 50,000 pages of new drawings and documents. There were widespread problems at the project, including delays in work by other contractors, which in turn delayed Westcon. The overall project became delayed by months and was substantially over budget.
Westcon requested change orders for extra work and project impacts, but voestalpine refused them. Days before reaching the major payment milestone of mechanical completion, voestalpine terminated Westcon, replacing Westcon with another contractor. voestalpine filed separate international arbitrations against three major contractors, including this one against Westcon, as pre-emptive strikes.
voestalpine sought to keep all of the money that was due to Westcon and to recover the costs it had paid to the replacement contractor. voestalpine’s claim against Westcon exceeded $47 million. Westcon filed a counterclaim for the value of unpaid work it had completed and for impact costs, totaling approximately $30 million.
The arbitrators found that voestalpine wrongfully terminated Westcon and denied all claims asserted by voestalpine. The award in favor of Westcon exceeded $28 million and has been paid.