Facts

EnerSys Delaware Inc. filed a claim against Altergy Systems, in relation to its Supply and Distribution Agreement. Altergy filed a counter-claim against EnerSys. The parties agreed to arbitrate the dispute.

CLAIMANT'S CONTENTIONS:
EnerSys claimed that Altergy appointed it as distributor of Altergy's Freedom Power Series fuel cell products. As a result, each party assumed certain rights and obligations under the assignment. EnerSys contended that Altergy breached the Supply and Distribution Agreement for failing to meet its obligations, including failing to turn over deal opportunities that it was entitled to negotiate. EnerSys also asserted contract breaches for services rendered. In addition, EnerSys sought compensatory damages.

Enersys asserted 13 affirmative defenses in response to Altergy's counterclaims.

RESPONDENT'S CONTENTIONS:
Altergy contended that it has met its contractual obligations. It accused EnerSys of anti-competitive conduct. As such, Altergy asserted causes of action for tortious interference, breach of fiduciary duty, violation of California and Delaware laws, breach of the Supply and Distribution Agreement and its related duty of good faith. Further, Altergy sought compensatory damages for lost sales, punitive damages, statutory damages, and certain damages for services rendered.

Damages

EnerSys sought nearly $5 million in damages and $2.5 million in attorney and expert fees. Altergy requested between $47,777,000 and $277,369,000 in damages for its anti-competitive claim under the Sherman Act. It sought between $46,953,000 and $265,241,000 for its tortious interference claim and between $46,953,000 and $265,241,000 in its claim under Delaware's Uniform Deceptive Trade Practices Act. In addition, it sought unspecified amounts for punitive and compensatory damages as well as $3,256,566 in attorney fees and costs.

Result

The arbitration resulted in a mixed ruling, but with Altergy ultimately prevailing. The arbitration panel found for EnerSys on its claim for relief for breach of contract for services rendered, which Altergy did not contest, and awarded it $339,583 in compensatory damages, the panel also found in favor of Altergy in its tortious interference claim. It awarded Altergy $55,420,000 in damages for that claim and $59,180 for its breach of contract claim based on services rendered. Adjusting for any offsets, Altergy was entitled to a net award of $55,139,597 plus attorney fees and costs of $3,039,729.

Other Information

ARBITRATORS: John Burritt McArthur, Gary L. Benton and Yaroslav Sochynsky.