MONTGOMERY, Ala. (Legal Newsline) – Alabama's high court has reversed a ruling that denied arbitration in a case over allegedly defective heavy mining equipment.

The May 4 Supreme Court of Alabama opinion, authored by Chief Justice Lyn Stuart, disagreed with the Tuscaloosa Circuit Court’s decision when the lower court denied Eickhoff Corp.'s request to move the breach of contract case to arbitration. The Supreme Court reversed and remanded the trial court’s ruling.

The Supreme Court stated the trial court erred in denying the motion and pointed out both parties agreed that the master service agreement states disputes would be handled with the American Arbitration Association.

The court's opinion states that Eickhoff went to court after Warrior Met Coal LLC filed a lawsuit against the manufacturing company in March 2017 alleging equipment it sold to Warrior was defective. Eickhoff responded to the claims with the motion for Warrior Coal to “arbitrate its claims pursuant to an arbitration provision in contracts executed after the sale of the equipment, not the original purchase-order contracts associated with the allegedly defective equipment,” according to the Supreme Court opinion. The trial court denied this motion.

While the initial purchase-order contract between Eickhoff and Jim Walter Resources (JWR), Warrior Coal's predecessor in interest, did not include any type of arbitration provision, the master service agreement did contain an arbitration provision that required both parties to go through the American Arbitration Association over any disputes, the opinion states.

JWR’s parent company, Walter Energy Inc. went bankrupt and Warrior Coal purchased the company as well as all of JWR’s agreements, including the initial contract JWR had with Eickhoff, although the job was not completely finished, the opinion states.

After the acquisition, the two parties went into another master service agreement that included an arbitration provision. Once the sale was complete and Warrior Coal had all of its items, Warrior Coal later informed Eickhoff in February 2017 that it had issues with the equipment it sold and delivered. Eickhoff disputed the argument the merchandise was defective and requested a meeting with Warrior Coal to settle the issue.

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