A contractor for a multimillion-dollar construction project at Highland Pellets LLC in Pine Bluff has asked a federal judge to confirm an arbitration award of $10 million against the wood pellet manufacturer.
MOR PPM Inc. of Society Hill, South Carolina, received the final award on Oct. 3 from the American Arbitration Association in connection with disputes involving the construction contract.
In January 2022, PPM sought arbitration and wanted $14 million in damages against Highland.
Highland, in its arbitration filings, denied PPM’s claims and was seeking $3.3 million in damages against PPM, according to the final award from the AAA.
The AAA denied Highland’s claims and awarded $7.6 million to PPM, plus nearly $800,000 in interest and $1.7 million in attorneys fees and costs for a total of $10.1 million.
The dispute between the two companies started in 2020 when Highland hired PPM to upgrade and increase production at Highland’s wood pellet plant in Pine Bluff.
The Highland plant supplies wood pellets used as fuel for renewable electricity production at a converted coal power plant. The company has a long-term contract with a European power producer.
PPM on its website said it is a leading provider of industrial mechanical, electrical and civil construction for the power generation, pulp and paper, chemical and general manufacturing industries.
The Highland contract carried a guaranteed maximum price of $20 million.
But problems at the project occurred shortly after the ink on the contract was dry.
“PPM began to recognize that newly issued designs for concrete and steel required the placement or installation of quantities significantly greater than the ‘maximum’ quantities identified in its pre-Contract proposals,” the AAA award filing said.
PPM claims for damages included 53 unpaid change order requests that totaled $7.9 million.
After the AAA made its decision, PPM’s attorneys, James R. Baxter of the Baxter Law Firm of Benton, and David M. Donovan of Watts Donovan Tilley & Carson of Little Rock, filed the application to confirm the arbitration award in U.S. District Court in LIttle Rock.
Highland was represented by attorney Matthew Finch of Gill Ragon Owen of Little Rock, who declined to comment.
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