Golden Pass Pipeline LLC v. ISC Constructors, LLC

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
GOLDEN PASS PIPELINE LLC,
Plaintiff,
VS.
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CIVIL ACTION NO. 4:26-CV-03087
ISC CONSTRUCTORS, LLC,
Defendant.
MEMORANDUM & ORDER
Before the Court is Defendant ISC Constructors, LLC (“ISC”)’s Motion to Stay
Proceedings Pending Appointment and Determination of an AAA Rule R-7 Arbitrator (ECF No.
12). Plaintiff Golden Pass Pipelines LLC (“Golden Pass”) has also filed a Motion for a Preliminary
Injunction to stay the ongoing arbitration proceedings (ECF No. 4). For the reasons that follow,
the Court GRANTS ISC’s Motion to Stay (ECF No. 12) and ORDERS that all proceedings in this
case 	shall 	be 	stayed 	pending 	the 	Rule-7 	Arbitrator 	decision’s 	decision 	on 	joinder 	and
consolidation.
I. 	BACKGROUND
The relevant facts are largely undisputed. Golden Pass is the owner of a construction
project at the heart of the dispute. ECF No. 1 at ¶ 3. Golden Pass contracted with Performance
Contractors Inc. (“PCI”) to build two pipeline compressor stations (“the Golden Pass Pipeline
Project”). Id. The Golden Pass Pipeline Project was ultimately completed in June 2025, nine and
a half months after the agreed upon date. Id. Golden Pass and PCI dispute who is responsible for
the delay. Id.
United States District Court
Southern District of Texas
ENTERED
May 15, 2026
Nathan Ochsner, Clerk
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The contract between Golden Pass and PCI contained a binding arbitration clause which
stated the parties “agree to resolve all differences arising out of or relating to this CONTRACT
through binding arbitration before three (3) arbitrators pursuant to the AAA Arbitration Rules.”
ECF No. 1, Ex. A (“Primary Contract”) at 88. ICS is not a party to this agreement.
In connection with the Golden Pass Pipeline Project, PCI hired ISC as a subcontractor to
perform electrical and instrumentation work, including installation of electrical cable at the two
compressor stations. ECF No. 1 at ¶ 18. PCI and ISC had a standing agreement entered into on
September 8, 2010 that governed ISC’s subcontracting work on the Golden Pass Pipeline Project.
ECF No. 15, Ex. A. (“the Subcontract”). Golden Pass is not a party to this agreement. As relevant
here, the Subcontract stated that “[ISC] agrees to make all claims for any additional compensation
or damages for which [PCI] is or may be entitled to seek reimbursement from the Owner in the
manner provided by the Prime Contract for like claims by [PCI] upon the Owner.” Id. at § 12.1.
The Subcontract further provides that “[PCI] may allow [ISC], by and through [PCI], to institute
any action or proceeding to recover damages by reason of any affirmative claim by [ICS], or by
reason of any deduction or refusal to pay by the Owner, for any reason, involving the work or
performance of [ISC].” Id. at § 12.1.2. Additionally, it states that “[i]n the event [PCI] is involved
in arbitration or litigation with the Owner involving issues related to [ISC’s] work, [ISC] agrees
to be joined in any such proceeding, if allowed by the arbitrators or Court.” Id. at § 12.2. The
Owner in this case refers to Golden Pass, and the Prime Contract is the agreement between Golden
Pass and PCI.
On March 26, 2026, ISC filed an arbitration demand before the American Arbitration
Association (“AAA”) against Golden Pass and PCI related to damages it allegedly suffered as a
result of the delay in the Golden Pass Pipeline Project. ECF No. 1, Ex. B (ICS demand). ISC
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asserted that it is “a party to an arbitration agreement dated 9/8/2010, which provides for arbitration
under the Construction Industry Rules of the American Arbitration Association.” Id. at 1. It did
not specify the parties to September 2010 agreement. The same day, PCI filed a similar arbitration
demand against Golden Pass. ECF No. 1, Ex. C (PCI demand). PCI’s demand stated that “[PCI’s]
claim includes a pass-through claim from its subcontractor, ISC, and this matter should be joined
with AAA matter No. 01-26-0001-4823.” Id. In the arbitration between PCI and Golden Pass,
Golden Pass has asserted counterclaims against PCI, including claims that involve ISC’s work on
the project. ECF No. 15 at 1-2.
On April 17, 2026, Golden Pass filed an objection to ISC’s participation in the pending
arbitration between Golden Pass and PCI. ECF No. 15 at 3. This triggered the AAA Rule R-7
mechanism for resolving disputes over consolidation and joinder; and on Monday, April 20, 2026,
pursuant to Rule R-7, ISC and PCI (but not Golden Pass) submitted a request to the AAA for
expedited appointment of a Rule R-7 Arbitrator. Id. On April 22, the AAA stayed the merits
arbitrations and pending a decision by the R-7 Arbitrator. Id. Parties have informed the Court that
the R-7 Arbitrator will hear oral argument on the question of joinder and consolidation on May 20,
2026.
On April 16, 2026, Golden Pass filed suit in this Court against ISC. Golden Pass seeks a
declaration stating that ISC has no agreement to arbitrate with Golden Pass, an order staying ISC’s
participation in the pending arbitration, an order preliminarily and permanently enjoining ISC’s
participation in the pending arbitration, and a declaration that ISC cannot state a breach of contract
claim against Golden Pass in connection with the Golden Pass/PCI Contract. ECF No. 1 at 11.
Golden Pass has separately filed a Motion for a Preliminary Injunction seeking an order
preliminary enjoining ISC from attempting to arbitrate any dispute with Golden Pass. ECF No. 4.
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For its part, ISC has filed a Motion to Stay Proceedings in this Court Pending Appointment and
Determination of an AAA Rule R-7 Arbitrator. ECF No. 12. The Motions are fully briefed.
II. 	DISCUSSION
Golden Pass does not dispute the enforceability of the arbitration agreement between itself
and PCI, nor—at least explicitly—does it seek to enjoin the pending arbitration proceeding
initiated by PCI. Rather, Golden Pass argues that, because there is no arbitration agreement
between Golden Pass and ISC, ISC must be enjoined from pursuing its arbitration demand against
Golden Pass before the AAA. Additionally, Golden Pass seeks a declaration that ISC cannot state
a breach of contract claim against Golden Pass in connection Golden Pass Pipeline Project because
it was not a party to the Golden Pass/PCI project.
The parties have engaged in extensive briefing concerning whether ISC’s right (or lack
thereof) to initiate arbitration against Golden Pass, which the Court has considered. But the Court
is of the opinion that regardless of the validity of ISC’s initial arbitration demand against Golden
Pass, the separate arbitration demand by PCI requires that the Court grant ISC’s Motion to Stay
and forebear ruling on the Motion for Preliminary Injunction until the R-7 Arbitrator has reached
a conclusion regarding joinder.1 As Golden Pass acknowledges, PCI’s arbitration demand
1 Golden Pass contends that ISC must satisfy the four-factor test laid out in Nken v. Holder, 556
U.S. 418 (2009) to be entitled to a stay. See ECF No. 17 at 9. But as ISC points out, that case dealt
with the circumstances under which an appellate court may stay enforcement of an order pending
judicial review. While Nken is sometimes invoked in other contexts, the Court agrees with ISC
that it applies to situations in which a party seeks a stay of enforcement of an existing Court order
pending an appeal, rather than a stay of a proceeding pending a parallel arbitration proceeding that
may impact the relief sought in the proceeding before this Court. The Court therefore declines to
address the Nken factors and instead proceeds “incident to its power to control its own docket.”
Clinton v. Jones, 520 U.S. 681, 706 (1997).
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explicitly stated that its “claim [against Golden Pass] includes a pass-through claim from its
subcontractor, ISC” and requested that the matter be joined with ISC’s demand against Golden
Pass and PCI. Thus, even if this Court were to conclude that ISC had no legal basis upon which to
include Golden Pass in its initial arbitration demand, this conclusion would be of no practical
consequence if the Arbitrator concluded that PCI could join ISC as a party in its arbitration
proceeding against Golden Pass.
Golden Pass agreed “to resolve all differences arising out of or relating to [the contract
with PCI] through binding arbitration,” Primary Contract at 88 (emphasis added). The ISC
Subcontract allowed ISC, “by and through [PCI], to institute any action or proceeding to recover
damages. . . by reason of any deduction or refusal to pay by [Golden Pass], for any reason,
involving the work or performance of [ISC].” Subcontract at § 12.1.2. PCI has properly invoked
the arbitration clause in its agreement with Golden Pass and has affirmatively sought to join ISC
as a party to the arbitration proceeding and assert claims on behalf of ISC. An arbitrator could
therefore reasonably conclude that ISC should be joined in the ongoing arbitration between PCI
and Golden Pass—even if ISC had included only PCI and not Golden Pass in its arbitration
demand. While Golden Pass’ position is “that any harm suffered by PCI’s subcontractors is solely
the responsibility of PCI,” ECF No. 1 at ¶ 22, this is a question for the arbitrators in the pending
arbitration between PCI and Golden Pass to decide—not this Court. The Court is therefore
unwilling to consider the merits of Golden Pass’ requests for declarative and injunctive relief
against ISC before the R-7 Arbitrator has made a determination as to whether ISC can be properly
joined as a party to PCI’s pending arbitration against Golden Pass. If the Court were to enjoin ISC
from participating in arbitration against Golden Pass at this juncture, it would effectively be
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interfering with the ongoing and undisputedly valid binding arbitration between PCI and Golden
Pass.
III. 	CONCLUSION
The Court therefore GRANTS ISC’s Motion to Stay (ECF No. 12) and ORDERS that all
proceedings in this case be stayed pending the Rule-7 Arbitrator’s decision on joinder and
consolidation. The parties are further ORDERED to confer and submit an update to the Court
within TEN DAYS after the Rule-7 Arbitrator issues a decision.
IT IS SO ORDERED.
SIGNED at Houston, Texas, on this the 15th day of May, 2026.
_______________________________
Keith P. Ellison
United States District Judge
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