Skidmore Energy, Inc. v. Maxus (U.S.) Exploration Co.
2011 Tex. App. LEXIS 5237
| Tex. App. | 2011Background
- Skidmore Energy and Maxus entered a 1996 contract to jointly evaluate and acquire Gulf of Mexico leases, acquiring working interests in seven leases.
- The 1998 Agreement restructured the relationship: Skidmore would transfer most leases to Maxus, Maxus would pay Skidmore $6.5 million and transfer Garden Banks Block 361 to Skidmore, and Exhibit B required a notice-and-reassignment mechanism for surrendering leases.
- On August 21, 1998, Skidmore executed six assignments to Maxus and Maxus assigned Garden Banks 361 to Skidmore; the assignments stated they were subject to the 1998 Agreement but did not include the Exhibit B notice-reassignment provision.
- Skidmore surrendered Garden Bank Block 361 in October 1999 before its primary term; Maxus surrendered several other leases in 2002–2002; none provided Skidmore prior notice or an opportunity for reassignment.
- In November 2004 Skidmore learned of Maxus relinquishments; May 2005 Skidmore sued for breach of the 1998 Agreement; the dispute was submitted to binding arbitration; a majority of the panel ruled for Maxus; the trial court denied a motion to vacate and confirmed the award; Skidmore and Intervenors appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitrator McNamara's evident partiality voids the award | McNamara's undisclosed stock ownership in Transocean and related relationships create evident partiality | Disclosures were adequate; any potential relationships were remote and did not imply partiality; waiver occurred if any | No evident partiality; award affirmed |
| Whether the arbitration panel exceeded its powers by ruling breach at closing | Panel exceeded by addressing a breach at closing not pleaded | Broad arbitration clause and defenses of waiver/estoppel/liability encompassed the issue; panel acted within scope | Panel did not exceed its powers; award affirmed |
Key Cases Cited
- Burlington Northern R.R. Co. v. TUCO Inc., 960 S.W.2d 629 (Tex. 1997) (evident partiality standard; nondisclosures can create evident partiality)
- Centex/Vestal v. Friendship W. Baptist Church, 314 S.W.3d 677 (Tex.App.-Dallas 2010) (broad arbitration scope and deference to awards)
- Graham-Rutledge & Co. v. Nadia Corp., 281 S.W.3d 683 (Tex.App.-Dallas 2009) (scope of arbitration and appeal principles)
- Prudential Secs. Inc. v. Marshall, 909 S.W.2d 896 (Tex. 1995) (strong policy favoring arbitration; deference to awards)
- Townes Telecomms. Inc. v. Travis, Wolff & Co., 291 S.W.3d 490 (Tex.App.-Dallas 2009) (arbitrator authority derived from agreement; scope concerns)
- Coker v. Coker, 650 S.W.2d 391 (Tex. 1983) (contract ambiguity standard discussed in arbitration context)