Originally from:

Journal of American Arbitration (JAA) - Vol. 6, No. 2

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ARTICLES

Eleventh Circuit Threatens Sanctions in
B.L. Harbert Int’l LLC v. Hercules Steel Co.
By Richard Holmes Snyder

I. OVERVIEW
B.L. Harbert International, LLC (“Harbert”) won a contract in
2000 to build an army facility in Fort Bragg, North Carolina. B.L.
Harbert Int’l, LLC v. Hercules Steel Co., 441 F.3d 905, 907 (11th Cir.
2006). Harbert then entered a subcontract with Hercules Steel
Company (“Hercules”), a North Carolina corporation, to provide the
steel needed for construction. Id. The parties to the subcontract
agreed that Hercules would deliver the steel to Harbert based on a
“Progress Schedule” or “Project Schedule,” and that any failure to
meet these delivery dates would result in liability for damages. Id.
The subcontract did not define the terms “Progress Schedule” or
“Project Schedule” but contained an arbitration provision in which the
parties agreed to submit their disputes “to binding arbitration under
the auspices of the American Arbitration Association.” Id. Harbert
issued two production schedules. B.L. Harbert, 441 F.3d at 907. The
2000 schedule contained earlier dates for delivery of the steel and
completion of subcontractor obligations than the 3000 schedule. Id.
Hercules failed to meet the delivery and completion dates contained
in the 2000 schedule but did achieve the dates in the 3000 schedule.
Id. at 907-08. Nonetheless, Harbert ceased payment on Hercules’
subcontract and demanded delay damages in excess of the
subcontract. Id. at 908.
Hercules invoked the arbitration provision within the subcontract
in 2003. Id. Arbitral proceedings were held over seven days in which
the disagreement centered on the question of which of the two
production schedules determined Hercules’ obligations under its
subcontract with Harbert. B.L. Harbert, 441 F.3d at 908. The
arbitrator ruled in favor of Hercules and denied Harbert’s
counterclaim, awarding the remaining subcontract balance, with
interest, totaling $369,775 to Hercules. Id.
Following rendering of the award, Hercules filed a request for
clarification asserting that the arbitrator made a mathematical error
because the award was less than the amount agreed to in the
subcontract. Id. Harbert filed a request for clarification and