This article was published in Law360 on December 4, 2019. © Copyright 2019, Portfolio Media, Inc., publisher of Law360. It is republished here with permission.

On Nov. 21, the Queen Mary University of London School of International Arbitration, in partnership with the U.K.-based law firm Pinsent Masons LLP, released its ninth annual international arbitration survey focused on international construction disputes.

As a nod to the significance the construction industry plays in the field of international arbitration, the 2019 Queen Mary University survey marks the largest industry-specific survey its School of International Arbitration has ever conducted and offers insights that will undoubtedly be used for years to come.
While the survey data and accompanying report provide a granular level of analysis concerning a wide variety of topics, below are some of the key takeaways of interest to U.S. practitioners.

Chinese Hosp. Ass’n v. Jacobs Eng’g Grp., Inc., 2019 BL 330340, 2 (N.D. Cal. Sept. 03, 2019)

This case arises out of the alleged breach of contract and defective design for the construction of a new hospital in San Francisco.  During construction, property owner and plaintiff Chinese Hospital Association (“Chinese Hospital”) became aware of alleged defects involving the designs provided by its subcontractor, architect-defendant Jacobs Engineering Group, Inc. (“Jacobs”).  Chinese Hospital terminated its contract with Jacobs for convenience mid-construction.

Decker Constr. Co. v. Wesex Corp., No. 2:18-cv-727, 2019 BL 232653 (S.D. Ohio June 24, 2019)

In Decker Construction Co. v. Wesex Corporation, the United States District Court for the Southern District of Ohio declined to dismiss a cause of action for fraudulent misrepresentation against Third-Party Defendant Mark Schrader (“Schrader”), the former Chief Financial Officer of Wesex Corporation (“Wesex”).  Wesex served as the general contractor on a construction project in New Albany, Ohio (the “Project”).  In its claim against Schrader, Third Party Plaintiff CCL Label, Inc. (“CCL”), the construction manager on the Project, alleged that Schrader signed affidavits included in Wesex’s payment applications that falsely certified Wesex’s subcontractors had been paid for their work on the Project.  Schrader sought dismissal on the basis that the Court lacked personal jurisdiction over him and that CCL failed to state a claim.

Skanska USA Building, Inc. v. J.D. Long Masonry, Inc., No. 1:16-cv-00933, 2019 BL 336852, (D. Md. Sept. 9, 2019)

On September 9, 2019, a Maryland federal court awarded Skanska USA Building, Inc. (“Skanska”) compensatory damages, pre- and post-judgment interest, and litigation expenses including attorney and expert fees in its suit against subcontractor J.D. Long Masonry, Inc. (“Long”) for defective masonry work at a Johns Hopkins University research facility.

  1. Lost profits, not part of unpaid contract balance, may be recoverable as consequential damages in contract claim, but cannot be included in lien. TSP Services Inc. v. National-Standard, LLC, 2019 BL 340267 (Mich. Ct. App. Sept. 10, 2019)

National-Standard, LLC contracted TSP Services, Inc. for asbestos abatement, demolition, restoration,…

Abdul Latif Jameel Trans. Co. v. FedEx Corp., No. 19-5315 (6th Cir. Sept. 19, 2019).

In the world of international arbitration, where document disclosure is already relatively limited compared to practices in federal and state court, 28 U.S.C. § 1782 — titled “Assistance to foreign and international tribunals and to litigants before such tribunals” — has been a commonly overlooked tool for obtaining useful evidence in support of an international arbitration. In broad strokes, the statute permits a federal district court to require a person within the district to provide documents or testimony for use in a proceeding in a “foreign or international tribunal.”

Precision Hydraulic Cylinders, Inc. v. Manufacturing. Technology, Inc., No. 7:18-CV-203-FL, 2019 BL 344743, 2019 U.S. Dist. LEXIS 156670 (E.D.N.C. Sept. 13, 2019)

Precision Hydraulic Cylinders, Inc. (“Precision”) issued a series of purchase orders to Manufacturing Technology, Inc. (“MTI”) to weld steel components together to create hydraulic cylinders. MTI agreed to develop welds for Precision’s small and large cylinders under two separate purchase orders.

Over the past decade, international arbitration has played an increasingly prominent role in the construction industry.  As contractors and owners pursue greater opportunities outside their domestic jurisdictions, international arbitration has provided parties with a reliable, flexible, and neutral forum to resolve disputes.  Indeed, a quick glance at the most recent statistics from any number of the leading international arbitral institutions, such as the International Chamber of Commerce and International Centre for Dispute Resolution, shows that construction arbitration accounts for one of the largest components of the institutions’ caseload.

United Illuminating Company v. Whiting-Turner Contracting Co. v. Cherry Hill Construction Co., Inc., et al. v. GEI Consultants, Inc., et al., 3:18-cv-00327-WWE (D. Conn. 2019)

In 2010 The United Illuminating Company (“UI”), an electric utility company, and Whiting-Turner, a construction contractor, entered into a general contractor agreement for the construction of the United Illuminating Central Facility Project (the “Project”) in Orange, Connecticut.  The Project required construction of an office building, an operations building, and related parking lots and common driveways.  Whiting-Turner and Cherry Hill Construction Co. (“Cherry Hill”), a heavy civil construction contractor, then entered into a subcontractor agreement which required Cherry Hill to perform site work.

BML Properties Ltd. v. China Construction America Inc., et al., 101 N.Y.S. 3d 597 (N.Y. App. Div. 2019)

On July 2, 2019, a New York appellate court upheld a lower court ruling by Justice Saliann Scarpulla, denying a state-backed Chinese contractor’s attempt to compel international arbitration arising out of a dispute involving the construction of the multibillion Baha Mar mega-resort in the Bahamas.  As a result of the ruling in BML Properties Ltd. v. China Construction America Inc., et al., 101 N.Y.S. 3d 597 (N.Y. App. Div. 2019), aff’ing No. 657550/2017 (N.Y. Sup. Ct. Jan. 24, 2019), the $2.25 billion lawsuit alleging “one of the largest construction-based frauds in this hemisphere” will remain in the New York courts.  As explained below, for those in the international construction industry, the case will be worth following.