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Overview | Litigation | Arbitration
Overview
Vinson & Elkins has represented project owners, developers, general contractors, architects, engineers, subcontractors, vendors, and municipalities in construction-related disputes. Our construction project experience includes chemical, petrochemical, and other manufacturing plants; pipelines; nuclear power plants; medical towers; commercial projects; multi-unit and single residential projects; and municipal projects, including convention centers and roads. We have extensive experience on claims involving breach of contract; tortious interference with contract; design and construction defects; fraudulent inducement; conspiracy; deceptive trade practices; and personal injury. Our lawyers also have significant experience on various damage models related to construction cases, including increased construction costs, lost profits, and consequential and exemplary damages.
We have resolved these disputes for our clients through mediation, arbitration, settlement and trial. While results of course depend upon the facts of each case, many of the cases we have handled resulted in resolutions where our clients paid nothing or paid nominal amounts relative to what was originally claimed in damages by the plaintiff. In some cases, we have been able to recover damages and attorney’s fees for our clients by pursuing successful claims and counterclaims. Our arbitration lawyers have represented clients in ad hoc and administered arbitration proceedings under most major arbitral rules, including AAA, ICC, ICSID, UNCITRAL and LCIA.
In addition to our litigation and arbitration experience, our lawyers also have extensive involvement in negotiating and drafting construction contracts and specifications. Our experience in the business side of the construction transactions is oftentimes very helpful in litigation matters.
The following are construction engagements in which our lawyers have obtained significant results:
Litigation
- V&E; lawyers obtained a substantial jury verdict for an international engineering and construction company on a claim against the owner of a new petrochemical plant. The case involved issues related to the plant design, cost overruns, and the delays and disruptions experienced during the engineering and construction phases of the project. The parties settled the case in court-ordered post-verdict mediation.
- We defended the contractor in a case involving claims that arose out of the construction of the Saks Fifth Avenue Center in Houston. The architects, engineers, and contractor were sued for negligence and breach of contract. Due to excessive rainfall during construction, one of the walls of the Saks Fifth Avenue theater had collapsed during construction causing considerable property damage. Each one of the defendants was successful in its defense of this insurance subrogation claim. This case was tried for approximately three weeks. We obtained a 12-0 verdict from the jury and a take-nothing judgment from the court in favor of our client. The case was not appealed.
- Our lawyers represented the architect in a case where the owner made claims against our client alleging negligent misrepresentation, fraud, negligence, breach of fiduciary duty, breach of implied warranty, breach of express warranty, deceptive trade practices, and usury. The plaintiff sought actual damages, forfeiture plus three times the amount of usurious interest allegedly charged, refund of all architectural fees, punitive damages, attorneys fees, pre- and post-judgment interest, and costs. We filed a counterclaim for the architect seeking his unpaid fees. An arbitration before three arbitrators lasted one week and resulted in an award in favor of our architect client in the amount of his unpaid architectural fees. All of the plaintiff’s claims were denied.
- We defended Brown & Root, Inc., and its parent, Halliburton Co., in a multi-billion dollar case alleging negligence in the design, engineering, and construction of the South Texas Nuclear Plant. The case required the review of millions of pages of documents; preserving the testimony of hundreds of witnesses; analyzing construction schedules that spanned a ten-year period; and formulating complex damage models. Although billions of dollars in damages were claimed, this case was ultimately settled to the client’s satisfaction for a fraction of this amount.
- V&E; lawyers analyzed and evaluated a construction delay/construction defect claim against a construction manager. The claim arose from the construction of a major medical tower project. The case was resolved for our client without the need for litigation.
- We represented an owner who brought suit against a general contractor for defective construction. The owner had tried to resolve the issues relating to the defective construction through negotiations with the general contractor for at least two years prior to filing suit. After filing suit, we were able to resolve the dispute without any discovery, with minimal attorney’s fees, and with full repairs to the satisfaction of the client, all in a relatively short period of time.
- Our lawyers represented a general contractor in multi-party litigation over alleged construction defects in connection with condominiums and a high-rise office building.
- We represented the design engineers in a case that involved a myriad of complex construction issues and allegations, including breach of contract, negligence, breach of warranty, cost overruns, delay claims, etc. The plaintiff’s claims arose out of the expansion and modification of an ethylene plant in Lake Charles. The plaintiff sought damages of approximately $200 million from the contractor and engineers. The case was filed in Louisiana State Court in Lake Charles, Louisiana. After extensive discovery and hearings before the court, the case was settled to our engineering client’s satisfaction after a three-day mediation proceeding.
Arbitration
- V&E; lawyers successfully represented defendant-designer/manufacturer of gas turbine in AAA construction arbitration related to a power plant in California.
- We successfully represented plaintiff-process plant owner in arbitration related to contamination of process feedstock and resulting damage to plant equipment.
- Our lawyers represented an architect in a AAA arbitration where the owner made claims alleging negligent misrepresentation, fraud, negligence, breach of fiduciary duty, breach of implied warranty, breach of express warranty, deceptive trade practices, and usury; plaintiff owner sought alleged actual damages, forfeiture plus three times the amount of usurious interest allegedly charged, refund of all architectural fees, punitive damages, attorneys fees, pre- and post-judgment interest, and costs; based on counterclaim, the three arbitrators awarded architect client the amount of his unpaid architectural fees and attorneys’ fees; all of plaintiff’s claims were denied.
- We represented home builders in two multiparty arbitrations before the Houston office of the AAA under the construction industry arbitration rules.
- Our lawyers successfully represented plaintiff-plant owner in ICC construction arbitration governed by New York law involving the design and construction of a gas plant in South America.
- V&E; lawyers secured a favorable award in an ad hoc arbitration in London under the UNCITRAL Rules on behalf of an Ecuadorian engineering company and a Cayman Island oil trading company against a Russian refinery for breach of an engineering, procurement, and construction contract for installation of a process for the production of high-octane, unleaded gasoline which involved counterclaims of fraud and non-compliance with Russian currency laws.
- We represented a developer and operator of power plants in an ICC arbitration involving the construction of a hydroelectric power facility in Central America. The issues involved complex questions relating to the custom and practice in project finance. Vinson & Elkins’ client achieved a complete success when the contractor accepted the standard termination payment and dropped its claims against the client.
- Our lawyers favorably settled an LCIA arbitration involving claims of breach of contract and fraud arising from contract for the fabrication of large pressure vessels to be incorporated in the construction of a massive offshore production platform.
- We represented a client in connection with a potential arbitration in South America involving claims exceeding USD 100 million arising out of a construction dispute, and resolved the case through contract amendments very favorable to our clients.
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