Originally from Journal of American Arbitration (JAA)

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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.