Bay Hotel & Resort v. Cavalier Construction Co. Ltd. et. al

Bay Hotel & Resort (Bay Hotel) (plaintiff) contracted with construction contractor Cavalier Construction Co. Ltd. (defendant) to build a hotel in the Turks and Caicos Islands. The contract followed the standard form provided by the American Institute of Architects and stated arbitration would be conducted under the rules of the United States-based American Arbitration Association (AAA). A dispute arose and was set for arbitration in Miami, Florida. A preliminary hearing addressing procedural matters and establishing a scheduling order was held, and a report was submitted to the AAA. The report required that the final arbitral award be in a form that showed the award was well-reasoned. A final award was issued in favor of Cavalier Construction. Bay Hotel objected to the form of the award, which included a written breakdown as required by the AAA rules, and requested that the arbitration panel provide an adequately reasoned award. The arbitration panel issued a supplemental award with additional reasoning. However, Bay Hotel asserted the supplemental award was still insufficient and filed a motion to set aside the award in a Turks and Caicos trial court. An expert in American law provided evidence on behalf of Cavalier Construction that under the American understanding of a well-reasoned award, the award issued in favor of Cavalier Construction would qualify. Bay Hotel provided an expert who argued the award did not qualify as well-reasoned. The trial court found Cavalier Construction’s expert more persuasive and refused to set aside the award. Bay Hotel appealed to the Turks and Caicos appellate court, which upheld the trial court’s ruling. Bay Hotel then appealed to the United Kingdom Privy Council.