BP Exploration Libya Limited v. ExxonMobil Libya L
2012 U.S. App. LEXIS 15706
5th Cir.2012Background
- BP, Exxon, and Noble dispute over arbitrator appointment under an Assignment Agreement and related Drilling Agreement.
- Assignment Agreement required Noble to support BP's takeover of the Rig and for BP to assume Exxon’s obligations by June 1, 2010.
- Three-party dispute arises but arbitration provision anticipates three arbitrators (one per party) with a neutral third chair.
- District court order required a five-member panel (three party-appointed plus two neutrals) or PCA appointment if deadlock.
- Noble demanded arbitration after alleged breaches; BP and Exxon perceived a lapse in naming arbitrators, triggering §5 intervention.
- Court held there was a lapse in naming arbitrators and District Court had §5 authority, but erred by authorizing five arbitrators instead of three and remanded guidance for three-arbitrator appointment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there was a lapse in naming arbitrators under §5. | Noble contends no lapse; ACA Rules provide resolution. | Exxon and BP contend mechanical breakdown warrants §5 intervention. | There was a lapse; §5 authorizes intervention. |
| Whether the district court could order a five-member panel contrary to the three-arbitrator agreement. | BP argues district court can select any fair method when no workable ACA method exists. | Noble argues district court must adhere to three-arbitrator agreement; five is beyond §5. | District court erred by ordering five arbitrators; limit to three as per agreement. |
| Appropriate remand procedure to appoint arbitrators consistent with the agreements. | BP/Exxon seek neutral appointment; three-arbitrator panel requirement should be honored. | Noble urges adherence to original arbitration framework without modification. | Remand to appoint three arbitrators with steps for BP/Exxon to appoint second, then neutral arbitrator. |
Key Cases Cited
- Gulf Guaranty Life Ins. Co. v. Conn. General Life Ins. Co., 304 F.3d 476 (5th Cir. 2002) (limits court intervention under §5 and discusses finality of arbitration orders)
- Rent-A-Center, West, Inc. v. Jackson, 130 S. Ct. 2772 (2010) (arbitration enforced according to terms; limits judicial involvement)
- Stop & Shop Supermarket Co. LLC v. United Food & Commercial Workers Union Local 342, 246 F. App’x 7 (2nd Cir. 2007) (deadlock can justify court appointment to avoid indefinite delay)
- Bulko v. Morgan Stanley DW Inc., 450 F.3d 622 (5th Cir. 2006) (vacatur when arbitration panel not appointed per contract method)
- Univ. Reins. Corp. v. Allstate Ins. Co., 16 F.3d 125 (7th Cir. 1994) (enforces contract terms and cautions against rewriting arbitration agreements)
- Stolt-Nielsen S.A. v. Animalfeeds Int’l Corp., 130 S. Ct. 1758 (2010) (emphasizes enforcing arbitration contracts according to their terms)
- AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) (FAA policy favoring arbitration and enforcement of contracts)
- Gulf Guaranty Life Ins. Co. v. Conn. Gen. Life Ins. Co. (duplicate entry for clarity), 304 F.3d 476 (5th Cir. 2002) (see above)