Hogan Lovells obtains Eleventh Circuit confirmation of $40 million arbitral award in SSK oil refinery dispute

Peruvian construction company Técnicas Reunidas de Talara SAC (TRT) sought to vacate an ICC award last year before the U.S. District Court for the Southern District of Florida. TRT argued the award should be vacated because two members of its counsel team joined a law firm on the opposing side while the case was still pending.

Hogan Lovells successfully appeared for SSK before the Florida federal court in Miami. In October, the district court rejected TRT’s claims, finding  that TRT had waived its right to object to the potential conflict, and had failed to demonstrate they were prejudiced by the alleged attorney side switching.

On Friday, the Eleventh Circuit agreed with SSK that TRT had waived its rights to object to the alleged side-switching by failing to make a timely objection to the potential conflict. The court also rejected TRT’s argument that attorney side-switching formed the basis for vacating an international arbitral award. 

The appeals court noted that TRT possessed full knowledge of all relevant facts concerning the conflict during the arbitration and that TRT failed to make a timely objection to the side-switching. The court further noted that TRT first objected to the alleged side switching more than a year after the arbitration proceedings had concluded—and after the panel issued a $40 million arbitral award against it. 

The Eleventh Circuit also agreed with the district court vacating the arbitral award under a public policy exception “would allow [TRT] to ‘keep a proverbial ace up its sleeve’ by ‘wait[ing] until it received a final adverse ruling to state its concerns.’” The Court further agreed with the district court judge that such a finding “would undermine the efficiency and fairness of arbitral proceedings” and would be inconsistent with the federal policy of enforcing arbitral awards.

The underlying dispute involved an ICC claim brought by SSK against TRT over work SSK was subcontracted to perform at the Talara refinery, Peru’s second largest oil refinery. Last March, a Miami-seated tribunal awarded SSK US$38 million and ordered TRT to return certain bonds and equipment.

“We are extremely pleased to have cleared the way for our client SSK to recover all the damages and equipment they are owed by TRT,” said Hogan Lovells lead partner Daniel E. González. “The ruling by the Eleventh Circuit respects the sanctity of an arbitral award and confirms the important principle that parties cannot sit on their rights awaiting a decision and later try to unwind such award by raising objections that could have, and should have, been addressed earlier.”

In addition to partner González (Miami), the cross-office Hogan Lovells team that represented SSK included partner David Dunn (New York), counsel Jessica Black Livingston (Denver), associate Cory Szczepanik (Denver) and summer associate William Winter (New York).