United States District Court, D. South Dakota, Southern Division
In the matter of American Arbitration Association Arbitration No. 02-16-0001-3705:
ANDRITZ INC., Respondent. POET DESIGN & CONSTRUCTION, INC., Claimant,
ORDER CONFIRMING ARBITRATION AWARD
Lawrence L. Piersol, United States District Judge.
a diversity case in which Claimant, POET Design &
Construction, Inc. ("POET") commenced this action
on April 2, 2019, by filing its Application to Confirm
Arbitration Award ("Application"). Doc. 1. Filed
under seal concurrent with the Application are copies of: 1)
the Final Award of Arbitrators dated April 1, 2019, Doc. 1,
Ex. A; 2) the Short Form of Agreement Between Design Builder
and Engineer for Professional Services entered into by and
between POET and Andritz, Inc. ("the Engineering
Contract"), Doc. 1, Ex. B; and 3) the Standard Form of
Agreement Between Design Builder and Contractor entered into
by and between POET and Andritz, Inc. ("the Performance
Contract"), Doc. 1, Ex. C. For the following reasons,
the Application to Confirm Arbitration Award, Doc. 1, is
Summary of Undisputed Material Facts
dispute arises from POET's construction of a state-of-the
art cellulosic ethanol facility in Emmetsburg, Iowa, known as
"Project Liberty" ("the Project"). Doc.
1, ¶ 3. POET began working with Andritz, Inc.
("Andritz") in or around 2009 for the purpose of
developing a pre-treatment system ("the System")
for the Project, to be designed and supplied by Andritz. Doc.
about July 12, 2010, POET and Andritz entered into an
Engineering Contract to provide certain design and
engineering services in furtherance of providing POET the
System. Doc. 1, ¶ 5. Subsequently, on or about August
29, 2012, POET and Andritz entered into the Performance
Contract for the System. Doc. 1, ¶ 6. The Performance
Contract contains an arbitration provision which provides in
pertinent part that:
Claims ... for which initial decisions have not become final
and binding, and which have not been resolved by negotiation
or mediation, but which are subject to arbitration pursuant
to Section 6.2 and 6.3 of the Agreement. . . may at the
option of either party, be submitted to, and shall finally be
decided by, arbitration which, unless the parties mutually
agree otherwise, shall be in accordance with the Construction
Industry Arbitration Rules of the American Arbitration
Association currently in effect at the time of the
arbitration . . . Any arbitration under this provision will
be held in Minnehaha County, South Dakota by a panel of three
arbitrators unless otherwise agreed by the parties.
The award rendered by the arbitrator or arbitrators shall be
final, and judgment may be entered upon it in accordance with
applicable law in any court having jurisdiction thereof.
Doc. 1, Ex. C, §§ A.4.4.1 and A.4.4.4.
disputes arose between POET and Andritz regarding
Andritz's performance and provision of the System under
the Performance Contract. Doc. 1, ¶ 8. As a result of
the parties' disputes, pursuant to the Performance
Contract, on or about April 18, 2016, POET commenced an
arbitration against Andritz with the American Arbitration
Association ("the AAA") pursuant to the
Construction Industry Arbitration Rules then in effect
("the Arbitration"). Doc. 1, ¶ 9. A panel of
three arbitrators was subsequently appointed by the AAA:
Adrian L. Bastianelli, Stephen K. Yungblut and H. Bruce
Shreves (collectively, "the Panel"). Doc. 1, ¶
10. Andritz denied POET's claim and alleged certain
counterclaims against POET relating to the Project and POET
denied Andritz's counterclaims. Doc. 1, ¶ 11. The
parties subsequently amended their claims, and all claims
arising under the Engineering Contract were consolidated in
the Arbitration. Doc. 1, ¶ 12.
convenience of the parties, witnesses, and counsel, by mutual
agreement, the Arbitration hearing was held at the AAA
offices located in Chicago, Illinois. Doc. 1, ¶ 13. On
December 3-7, 2018, December 10-14, 2018, and January 7-9,
2019, the Panel held a hearing at which POET and Andritz
appeared and offered evidence through live testimony and
exhibits ("the Hearing"). Subsequent to the
Hearing, by further agreement of the Panel and the parties,
the parties submitted post-Hearing briefing to the Panel.
Doc. 1, ¶ 15. Following the post-Hearing briefing, the
Arbitration was closed on March 1, 2019, from which time the
Panel had thirty (30) days to issue its reasoned award. Doc.
1, ¶ 16.
April 1, 2019, the Panel issued its reasoned award ("the
Award"). In the Award, the Panel unanimously awarded
POET the principal amount of $7, 533, 815.00 in damages
against Andritz to be paid "[w]ithin thirty (30)
calendar days from the transmittal of [the Award] to the
parties," along with "interest at the judgment rate
in South Dakota accruing on any amounts remaining unpaid
thirty days after receipt of [the Award]." The Award is
"in full settlement of all claims and counterclaims
submitted to this Arbitration. All claims and counterclaims
not expressly addressed in or excluded from [the Award] are
hereby denied." Doc. 1, Ex. A at 3.
April 2, 2019, POET filed with the Court its Application to
Confirm Arbitration Award ("Application"). Doc. 1.
Andritz filed a response and joined in POET's
Application. Doc. 12. In its response, Andritz disputes only
two of the allegations detailed by POET in its Application.
First, Andritz denies POET's characterization of the
Award's language to the extent it states that only claims
"under" the Engineering Contract and Performance
Contracts were resolved by the Award. Andritz stated that
"the Award clearly states that it fully settles all of
POET's professional negligence, and alleged tortious
conduct, as follows: 'This award is in full settlement of
all claims and counterclaims submitted to this Arbitration.
All claims and counterclaims not expressly addressed in or
excluded from this Final Award are hereby denied." Doc.
12, ¶ 19. Second, although Andritz admits and joins in
POET's request that this Court issue an order confirming
the Award, Andritz argues that no monetary judgment should be
entered against Andritz because all amounts due were paid by
the deadline set forth in the Award. Doc. 12, ¶ 26.
Andritz further states that POET's Application was
unnecessary because it was filed without any consultation
with Andritz and because Andritz did not intend to move to
vacate the Award and that as a result, "Andritz should
not be responsible for any costs of this action." Doc.
12, ¶ 26.
13, 2019, POET filed its Reply brief in support of its