Judge orders arbitration in dispute over $1.2 million bill for Gramercy refinery construction project

By Charmaine Little | Nov 21, 2018

NEW ORLEANS – The U.S. District Court for the Eastern District of Louisiana recently granted a motion to compel arbitration in a dispute over approximately $1.2 million in unpaid bills for construction work at a refinery in Gramercy. 

In a ruling filed Nov. 19,  U.S. District Judge Sarah Vance said her decision was based on a binding arbitration provision in an agreement between the contractor, Primoris Energy Services Corp., and New Day Aluminum LLC, the parent company of Noranda Alumina, which operates the refinery. 

Court filings said Primoris entered into a written agreement to provide materials, equipment and labor for construction at Noranda’s facility in October 2107. In its lawsuit filed last June against New Day alleging breach of contract, open account and unjust enrichment for the amount due, Primoris said it finished its end of the deal and claimed Noranda has not and refuses to pay the approximately $1.2 million it is owed for the project. 

New Day responded with the motion to compel arbitration, which the court granted.

Though New Day is the parent company for Noranda, and therefore isn’t a signatory in the contract, the court pointed out the defendant can still compel arbitration as outlined in the agreement. “The court finds that both contracts evidence an agreement between the parties to arbitrate disputes arising from performance on the contracts,” the court said, pointing out that there is a clause that binds the parties to arbitration should a disagreement occur.

Primoris contended arbitration wasn’t binding because the clause said “either party may make written demand” for arbitration, and doesn’t make it a requirement, because of the word “may.” 

The court disagreed and granted New Day’s motion to compel arbitration.

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