Opinion ID: 786494
Heading Depth: 3
Heading Rank: 1

Heading: Kvaerner

Text: 6 This litigation arose from a $550 million project involving the construction of a steel plant in Alabama. The project owner, IPSCO Steel, Inc. (IPSCO) hired Kvaerner as its Project Manager. Under the Project Management Agreement (PMA), Kvaerner was responsible for recommending the contracts that IPSCO awarded to various subcontractors and suppliers. The PMA also specified that Kvaerner was IPSCO's agent for the purpose of administering Supplier Contracts and managing and coordinating Suppliers' Work and that, in connection with liens and disputes, Kvaerner was to protect IPSCO's interests at all times. The PMA prescribed certain penalties and incentives. Kvaerner expressly warranted that the Aggregate Cost of the project would not exceed a Guaranteed Maximum Price of $182 million and that it would reimburse IPSCO for any costs in excess of $182 million. If, however, the Aggregate Cost came in below the Guaranteed Maximum Price, IPSCO promised to share 50% of the savings with Kvaerner. 7 The PMA anticipated that certain disputes would arise with the suppliers and it authorized Kvaerner to serve as IPSCO's litigation manager. The relevant provision, which is Section 4.04(x) in the PMA, reads: 8 The Project Manager [Kvaerner] shall be primarily responsible for the management and resolution, either with its own resources or through legal counsel or other consultants, of claims and disputes between Suppliers and with Suppliers within the Guaranteed Portion of the Project ... provided that [Kvaerner] shall promptly inform and keep IPSCO fully informed of such claims and disputes and any negotiations or legal proceedings with such Suppliers ... [and] that any final resolution or settlement of such dispute shall be subject to IPSCO's approval ... [and] IPSCO's interests are otherwise at all times protected .... 9