Contract analysis

I. Introduction and Purpose of Letter Calderwood & Harkness LLP ("C&H" or "this Firm") represents Whitmore Aerospace LLC ("WAL" or the "Insured"), a Delaware limited liability company headquartered at 4200 Wilson Boulevard, Suite 1100, Arlington, Virginia 22203. WAL is the named insured under Commercial General Liability Policy No. PCE-GL-2021-08854 (the "Policy") issued by Pinnacle Continental Insurance Co. ("Pinnac

II. Identification of the Insured For purposes of the Insurer's records and coverage analysis, the relevant identifying information for the named insured is as follows: WAL is a leading supplier of critical propulsion-system components and structural airframe assemblies to both military and commercial aviation customers. WAL's primary manufacturing operations are conducted at its facility in Manassas, Virginia, where

III. Description of the Underlying Proceeding On November 7, 2022, Kestrel Dynamics GmbH ("Kestrel"), a German limited liability company (Gesellschaft mit beschränkter Haftung) registered at Industriestraße 88, 70565 Stuttgart, Germany (Commercial Register No. HRB 745621, Amtsgericht Stuttgart), filed a Request for Arbitration with the International Chamber of Commerce. The arbitration has been assigned ICC Case No.

IV. Summary of the Underlying Contract The dispute arises from a Master Supply Agreement for Titanium Alloy Turbine Housings, bearing internal reference number WAL-KDG-MSA-2018-0615 (the "MSA"), which was executed by the parties on June 15, 2018. The following summarizes the material terms of the MSA and its subsequent amendments: Parties. The MSA was entered into between Whitmore Aerospace LLC, as Buyer, and Kestrel

V. Summary of Kestrel's Claims Against WAL In its Request for Arbitration, Kestrel asserts that WAL committed a material breach of the MSA. Kestrel's claims can be summarized as follows: (i) Wrongful Rejection of Deliverables. Kestrel alleges that WAL wrongfully rejected fourteen (14) lots of titanium alloy turbine housings delivered between March 2022 and September 2022, totaling approximately 1,680 individual units

VI. WAL's Preliminary Position and Defenses WAL categorically denies all claims asserted by Kestrel and maintains that its termination of the MSA was proper, justified, and fully consistent with the contractual provisions governing quality failures and termination for cause. WAL's principal defenses may be summarized as follows: Legitimate Quality Rejections. WAL rejected the lots at issue based on independent metall

VII. Potential Financial Exposure We wish to draw Pinnacle's attention to the magnitude of the potential financial exposure at issue in this arbitration. The total quantum of damages claimed by Kestrel is approximately €47.3 million, which at current exchange rates equates to approximately $49 to $50 million. While WAL believes the claims are without merit and intends to mount a vigorous defense, the Insurer should b

VIII. Identification of Counsel WAL has retained Calderwood & Harkness LLP to serve as its defense counsel in the ICC arbitration proceeding described herein. The C&H team responsible for this matter is as follows: The C&H engagement number for this matter is 1019-00001. All billing records, correspondence, and work product will be maintained under this engagement number. The primary address for all correspondence to

IX. Request for Coverage Determination WAL hereby formally requests that Pinnacle Continental Insurance Co. undertake a prompt and thorough review of Policy No. PCE-GL-2021-08854 and issue a coverage determination with respect to the following matters: (a) Whether the claims asserted by Kestrel Dynamics GmbH in ICC Case No. 27914/MHM fall within the scope of coverage afforded by the Policy, including but not limited

X. Reservation of Rights by the Insured WAL expressly reserves all rights, claims, and defenses available to it under the Policy, at law, and in equity, including without limitation: (a) The right to challenge any denial of coverage, in whole or in part, by Pinnacle; (b) The right to contest any reservation of rights, coverage exclusion, or coverage limitation asserted by Pinnacle; (c) The right to seek a judicial or

XI. Request for Acknowledgment and Contact Information WAL respectfully requests that Pinnacle acknowledge receipt of this notification in writing at the earliest practicable date, and that Pinnacle provide the following information in its acknowledgment: (a) The name, title, and direct contact information (telephone number, e-mail address, and mailing address) of the claims adjuster assigned to this matter; (b) The

1. Copy of Request for Arbitration filed by Kestrel Dynamics GmbH, dated November 7, 2022 (ICC Case No. 27914/MHM), with all exhibits thereto

2. Copy of relevant portions of Policy No. PCE-GL-2021-08854 (coverage summary page and endorsement schedule) cc: Dana Prescott, Vice President & General Counsel, Whitmore Aerospace LLC (via e-mail and first-class mail) cc: Marcus J. Whitmore III, Chief Executive Officer, Whitmore Aerospace LLC (via e-mail and first-class mail) cc: Vivienne St. Claire, Partner, Calderwood & Harkness LLP (internal distribution) Item |