Our general contractor client was sued for over $5 million for alleged delays in the completion of a large hotel repositioning/refurbishment project.  We counter-sued on behalf of our client for over $1 million in its unpaid contract balance.  The client was an experienced hotel restoration/repositioning contractor with a long history of working with many of the major hotel brands.  The Owner, a large real estate investment trust owning and operating nearly 50 hotels nationwide, agreed to provide all the required furniture, fixtures, and equipment (FF&E) needed to complete the project.  The general contractor was to install the FF&E and perform other reconstruction work.  The project took twice as long as expected — finishing five months late.  During the project, the Owner had repeatedly blamed our client for delays in completing floors and public areas and later terminated the contract after it was 99% complete.  The Owner simultaneously initiated arbitration and demanded liquidated and other damages of over $5 million.  In its demand, the Owner claimed that the general contractor had mismanaged the project and caused all of the delays.

          Over the course of a three-week hearing held online, we established that the Owner had, in fact, failed to deliver the FF&E on time and had continually interfered with our client’s scheduling for the project such that the Owner, rather than our client, was actually responsible for the delays.  The Panel of three very experienced construction arbitrators unanimously agreed that the Owner had delayed the project and that the contract had been wrongfully terminated — absolving our client of any obligation to complete the project or perform any further repairs or warranty work.  In the end, the Panel rejected all the Owner’s claims, including its request for over $3 million in liquidated damages, and instead awarded our client its full contract balance of over $1 million.  This victory was achieved by careful preparation and planning, effective use of lay testimony, and the presentation of clear and concise arguments.

          Not only was the outcome very good for our client, but the virtual nature of the hearing was also beneficial as well.  Had it not been for the COVID pandemic, the hearing would have been held in New York City with all of the attendant travel, lodging, and logistical expenses.  Conducting the hearing remotely meant that all of the lawyers, arbitrators and witnesses could appear from their homes or offices, which allowed more witnesses to “appear” than would normally be the case.   Careful management of the process also allowed sufficient visual interaction with witnesses to enable the Panel to assess their credibility.  To ensure that the process was as efficient as possible, the parties were each limited to a set number of hearing hours, and the time constraints were enforced by the use of a “chess clock” where both direct and cross-examination time is charged to the “speaking” attorney.  This forced both sides to efficiently use their hours so that time could be held in reserve for unexpected events.  In the end, the hearing finished earlier than the parties expected.  This case demonstrated that remote hearings can be very efficient both in obtaining the desired outcome and in saving process costs.

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