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Click here for the full text of this decision FACTS:In September 1998, Holcim LP (Holcim) entered a turnkey agreement with Watkins Engineers & Constructors, Inc. (Watkins) for the construction of a cement production line at Holcim’s factory in Midlothian. The turnkey agreement required Watkins to provide a fully functional production line. Subsequently, Watkins entered an agreement with HWI as a subcontractor. This agreement required HWI to supply equipment for the project. The turnkey agreement required Watkins to substantially complete the project by January 2000. Because the production line was not substantially completed several months after this deadline, Holcim terminated the contract with Watkins. Pursuant to an arbitration clause in the turnkey agreement, Holcim filed a claim with the American Arbitration Association against Watkins, seeking repair costs and liquidated damages. Watkins filed a counterclaim against Holcim for breach of the turnkey agreement and a third-party claim against HWI pursuant to an arbitration clause in a purchase agreement between Watkins and HWI. The arbitration panel asked for Holcim’s position on HWI’s joinder as a party to the arbitration. Holcim objected on several grounds; however, it agreed to allow Watkins to pursue its third party claim against HWI, provided that the arbitration panel bifurcated the proceedings with the first phase addressing the claims between Holcim and Watkins and the second phase addressing the claims between Watkins and HWI. The arbitration panel entered an order requiring bifurcated proceedings with the first phase addressing the disputes between Holcim and Watkins and the second phase addressing the disputes among Holcim, Watkins, and HWI. At the conclusion of the first phase, the arbitration panel found that Watkins did not substantially complete the project and that Holcim was entitled to recover liquidated damages and costs totaling $4,876,859. The panel also found that Watkins’ breach of the turnkey agreement was not material and that Watkins was entitled to recover the contract balance of $7,560,730, less Holcim’s damages, leaving Watkins a net recovery of $2,683,871. Holcim then filed a motion to bar HWI’s claims which were to be addressed in the second phase of arbitration. Holcim contended that HWI’s claims should be denied because: 1. There was no arbitration agreement between Holcim and HWI, 2. Holcim was never named as a defendant and had no opportunity to file an answer, and 3. A court of law is the proper forum in which to decide whether a particular claim is subject to arbitration. The panel did not immediately respond to Holcim’s objections, and in the interim Watkins filed for bankruptcy. The panel later overruled Holcim’s objections, finding that it had jurisdiction to decide HWI’s claims against Holcim. At the conclusion of the second phase, HWI raised new claims against Holcim, including breach of contract and trust fund theories. Holcim objected to the introduction of these new claims and renewed its objection to the panel’s jurisdiction to decide these issues because of the lack of an arbitration agreement between Holcim and HWI. After the panel overruled Holcim’s objections, Holcim sought a temporary restraining order and an injunction in district court because of the lack of an arbitration agreement between Holcim and HWI. The court denied Holcim’s motion. The panel then issued its final award. It concluded that Watkins was liable to HWI for the net contract balance of $5,495,061. The panel awarded HWI $27,512 for its claims against Holcim and imposed a constructive trust for the benefit of HWI on the $2,683,871 Holcim owed Watkins. The trial court confirmed the arbitration award. Holcim filed an interlocutory appeal. HOLDING:Reversed and remanded. To begin, the court stated that a party seeking review of an order that confirms or denies an arbitration award may do so by an interlocutory appeal. The court also found that Holcim’s petition to vacate the arbitration award was not barred because of Holcim’s failure to seek a stay under Texas Civil Practice & Remedies Code �171.023; that Holcim was not estopped to deny that HWI’s claims lie within the scope of the arbitration clause in the turnkey agreement; and that equitable estoppel does not preclude Holcim from objecting to the arbitrability of HWI’s claims. Finally, the court stated that the plain language of the turnkey agreement evidenced the intent of Holcim to arbitrate with Watkins but did not confer on HWI a right to compel arbitration of its claims against Holcim. Accordingly, the court held there was no arbitration agreement between HWI and Holcim. OPINION:Reyna, J.; Vance and Reyna, J.J. PARTIAL CONCURRENCE AND PARTIAL DISSENT:Gray, C.J. “Thus, the order of a direct payment from Holcim to HWI for that equipment and services is not the result of arbitration between Holcim and HWI and should not be interfered with in this appeal. To the extent described, I dissent from this Court’s judgment, but otherwise, join the result thereof.”

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