MCI CONSTRUCTORS, LLC v. City of Greensboro
610 F.3d 849 | Court of Appeals for the Fourth Circuit | 2010
What This Case Means for Subcontractors
MCI Constructors sued the City of Greensboro over a wastewater treatment plant construction contract. The City terminated MCI's work and an arbitration panel awarded the City $14.9 million in damages. The appeals court upheld the arbitration award, finding the City had valid grounds to terminate for cause. This matters to subcontractors because it shows courts will enforce arbitration decisions against contractors, even for large damage awards.
Key Takeaways
- •Arbitration awards are very hard to overturn on appeal—courts rarely second-guess arbitrators' decisions unless there's clear abuse of power
- •Termination for cause clauses are enforceable and can result in massive financial liability; document all performance issues carefully
- •If your contract requires arbitration, expect that outcome to be final—appeals courts won't retry the case or reconsider the facts
The City's termination of MCI's performance under the contract was for cause.
Frequently Asked Question
Can I appeal an arbitration award if I think the arbitrator got it wrong?
It's very difficult. Courts almost never overturn arbitration awards unless the arbitrator clearly exceeded their authority or the award was obtained through fraud or misconduct. In this case, the court confirmed a $14.9 million award against the contractor because the arbitration process was fair and the arbitrator stayed within their powers. Focus on performing well and documenting issues rather than counting on appeal.
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